Austin, Texas, USA – March 3, 2021 – Expect to see a substantial increase in consumption-based services and pay-as-you-go pricing in 2021, according to Gotransverse (www.gotransverse.com), the leading global provider of enterprise order-to-cash solutions. Gotransverse has seen a shift to consumption-based billing models among its partner and customer base. Companies are embracing these usage-based models to drive recurring revenue as consumers seek alternatives to monthly subscription services.
Market indicators show that consumers are starting to suffer from subscription fatigue. The 14th Digital Media Trends survey from Deloitte indicates that 40% of Millennials feel overwhelmed by the number of entertainment subscription services they have to manage, and 43% plan to cut the number of subscriptions. Similarly, about 30% of Generation Z and Generation X subscribers feel overwhelmed, indicating they have more services than they can handle. B2B services are not as susceptible to subscription fatigue, especially if B2B service providers focus on customer retention and upselling. However, more hybrid business models are entering the market with a mix of subscription and consumption-based pricing.
“We are seeing OTT subscriptions leveling off as consumers hit subscription burnout. But, we also are seeing more companies building recurring revenue using a combination of subscription and consumption billing or by solely adopting pay-as-you-go pricing,” said James Messer, CEO of Gotransverse. “In the B2B space, we are seeing more companies learning from communications service providers and adopting consumption-based revenue models. For example, Snowflake, a Gotransverse partner, had the largest SaaS IPO to date in 2020, and their revenue is based solely on a usage-based pricing model.”
“We have been tracking agile billing strategies since we pioneered the concept nearly a decade ago, and we are seeing more companies looking beyond simple subscription models to embrace consumption as a core part of billing,” said Andrew Dailey, Managing Director of MGI Research. “Consumption-based billing was a major theme at MGI’s recent Monetize Forum, and we expect it will continue to claim a larger share of the market, especially with the availability of sophisticated billing platforms like Gotransverse.”
Even though some might expect usage-based services to make revenue projections more challenging, trends quickly emerge. More companies are adopting various forms of consumption-based billing to drive revenue growth. Some companies opt for prepaid services, with or without additional fees for overage, while others are using post-paid billing for services. Thanks to the development of more sophisticated, cloud-based monetization platforms like Gotransverse, developing and testing agile billing models makes it easier to refine different recurring revenue billing models.
Gotransverse provides cloud-based software that enables companies to operate as a subscription business model, including the often-challenging aspects of usage-based pricing and monetization at internet scale. Founded by globally recognized billing experts, the company offers an intelligent billing and subscription management platform that automates the subscription order-to-cash process, including billing, rating, collections, mediation, analytics, and revenue recognition. Gotransverse was founded in 2008 and is headquartered in Austin, Texas.
For more information, visit http://gotransverse.com.