What is subscription and billing management?


Subscription and billing management is the method of handling of a subscription’s entire lifecycle for a customer and charging them throughout the agreement. In other words, subscription management is the art of managing your customer’s lifecycle with your company. It begins when a customer signs up for or purchases your product or service and ends at the point where they cancel or leave the subscription.

During the subscription period, subscriptions can be upgraded, downgraded, amended, paused, and undergo many other types of modifications. Billing management is the process of a business tracking and managing invoices and accounts across any number of customers and can involve multiple billing management solutions.




Contents

  1. What is a subscription?
  2. What is not subscription management?
  3. Why is subscription management important?
  4. What is a subscription model?
  5. What is PIM?
  6. What are the important subscription management terms?
  7. How can subscription management help you?
  8. What are the market challenges and opportunities? 


What is a subscription?


A subscription is a service contract or agreement between a vendor (seller) and a customer (buyer) for the rights to use a product or service or combination of both (known as a bundle) for a specific timeframe. The subscription starts when the customer signs up to the vendors product, service, or bundle, and ends when the customer cancels the service, depending on the specific terms of the agreement.

Subscriptions are either manually managed or by a subscription management software or platform.


What is not subscription management?


Subscription management is not simply taking care of recurring billing and payments for products or solutions bought by a customer on more than one occasion. In fact, subscription management covers all the changes, processes, and complexities that arise with a subscription as it moves through its lifecycle from beginning to end, including changes and updates to its terms, pricing, duration and more.


Why is subscription management important?


While there are several reasons subscription management is important, including creating efficient processes, accurate accounting, timely delivery and an improved customer experience.

Subscription management as a business model is important to key channel players, including telcos, MSPs and IT distributors, today from a business strategy perspective for three main reasons:

  • The IT market has shifted from products to subscriptions, and as of 2022, the XaaS subscription model is generating 77% of gains from customers
  • Self service capabilities for SMBs can help make their IT spend go further
  • As a key channel offering, subscriptions align with the shared and circular economy


What is a subscription model?


A subscription model is a strategic business approach that involves selling the rights to use a product or solution for a period of time in order to generate recurring revenue on a period basic, whether per month or year.

What is subscription management







What is PIM?


PIM stands for product information management. It’s an important concept in relation to subscriptions because PIM is the process of maintaining and distributing critical information about a product or solution as changes arise.

As the process flow can become quite complicated, a PIM platform can be used to create efficiencies through automation. Learn more about PIM how to reduce product information management (PIM) complexity.


What is a PIM platform

What are some other important concepts and terms to know for subscription management?


The pricing and billing model for subscriptions is typically structured with a tier based on features or numbers of users. Often, companies choose to bill with two models: either usage-based or freemium. Incremental revenue can be made from potential add-ons—one way is to create XaaS bundles, though creating these bundles can cause some complexity without the use of a subscription platform.

Some typical processes during an active subscription include:

  • Proration: Charging your customers only for the period they have used your product or service
  • Communication: Making effective and ongoing communication with your customer one of your top priorities
  • Engagement: Reaching out to your customer to make periodic contact, whether by phone, email or automated notifications
  • Payment: Staying on top of revenue collection either manually or using automation
  • Grace periods: Handling the extension of time to make payments, either by personal contact or through automation


Some of the typical processes following a subscription period include:

  • Feedback: Collecting insights on your customer’s experience
  • Renewal: Moving the subscription through its renewal phase either manually or with your subscription platform





How can subscription management help you?

Telcos, MSPs and IT distributors are faced with their own set of challenges and opportunities. Deciding to create or grow an XaaS marketplace can help you capture more ARPU as margins tighten due to a saturated market.

The path of offering and managing XaaS subscriptions opens up new revenue opportunities from sales of cloud solutions, delighting customers with the solutions they need and establishing yourself as the one partner they need to source all of their technology. As a result, you can better overcome the issue of customer churn by increasing customer satisfaction and loyalty.





Traditional Offerings

What are the market challenges for channel players


TELCOS

  • Saturated market with lack of customers and low margins
  • Lack of opportunity for growth and scalability
  • Striving to become the one solution provider of choice


MSPs

  • Low margins
  • Making the transition from product selling to solution selling
  • Difficulty in competing for new customers against competitors


IT DISTRIBUTORS

  • Low margins (2-5% on average)
  • Decreased growth and low scalability
  • Reduced efficiency and higher operational costs


ISVs

  • Standing out among competitors
  • Generating capital to support growth
  • Reaching new partners to scale the business


TECH VENDORS

  • Increase margins and recurring revenue
  • Provide more value beyond hardware and standard solutions
  • Find ways to reach new customers and markets

XaaS Subscription Offerings

What are the market opportunities for channel players


TELCOS

  • Entering three markets with stellar growth opportunities, cybersecurity ($139B), cloud ($445B) and IoT ($384B)
  • Make scalability possible with end-to-end automation of subscriptions
  • Develop a storefront for an XaaS marketplace to increase customer service and loyalty


MSPs

  • Capture higher margins on software and services versus hardware
  • Selling solutions opens up new market opportunities and requires less headcount, enhancing scalability
  • Stronger customer loyalty with less churn


IT DISTRIBUTORS

  • Expand market share as an XaaS retailer while avoiding costly acquisitions if desired
  • Use a hybrid delivery model of traditional and digital to increase revenue (9% growth on average)
  • Increase customer loyalty and a more profitable return on capital employed (ROCE) with more offerings and operationally efficient digital distribution


ISVs

  • Increase sales through the channel by following a subscription model
  • Improve efficiency by standardizing integrations with partners using a management subscription platform
  • Merge direct and indirect systems to streamline operations


TECH VENDORS

  • Increase adoption of solutions and revenue through third-party bundles
  • Connect with different players across the supply chain
  • Increase differentiation in the market for your solutions





Ready to learn more about managing subscriptions?


Here are some resources to explore of information, including how CloudBlue subscription platform can help.


Subscription Billing Solutions

Subscription Billing and Management Solutions

Learn More

Switching to a subscription model

3 Issues to Resolve Before Switching to a Subscription Business Model

Learn More

Distribution Platform

CloudBlue’s End-to-End Distribution Platform

Learn More









Mike Jennett, Director of CloudBlue Platform Strategy, is an accomplished business and technology executive. With a deep focus on product development and go-to-market strategy, he plays a pivotal role driving strategic growth and market expansion. Mike’s career is characterized by his adeptness in driving technological advancements and his commitment to leading digital transformations with experience including IDC where he was VP of the Mobility and Digital Transformation IEP practices, and HP where he held numerous leadership roles. Mike’s expertise is also reflected in his published works and contributions to multiple tech publications. Mike holds a B.A. from California Polytechnic University.
Having previously to strategic product management, agile transformations, and user experience in CloudBlue, Taylor Giddens heads the Services & Solutions team where he ensures smooth delivery, operations and solution growth for our partners and customers.

The team includes technical account management, managed services, support, custom solution development, and customer enablement.

Prior to CloudBlue, his resume boasts leadership of some of the world’s largest companies during their digital transformations and marketplace launches. Taylor is a practitioner of servitude leadership when it comes to enabling his team to drive positive outcomes on the road to operational excellence.
Laurens van Alphen, a visionary entrepreneur with over 29 years of internet technology expertise, serves as Director of Technical Managed Services at CloudBlue, responsible for Operations and Delivery of CloudBlue SaaS.

As a Dutch racing champion and car enthusiast, he brings the same drive to the tech realm, steering Keenondots from a managed hosting firm to a global cloud enablement leader. Laurens is celebrated for his outcome-driven leadership, deep industry insight, and passion for balancing business innovation with client engagement.
Lincoln Lincoln is CloudBlue’s Head of Global Sales; having been with the company since November 2017. Leading CloudBlue’s global go-to-market organization, he’s responsible for driving accelerated and sustained mutual growth with CloudBlue’s customers and partners, as well as forming new customer partnerships across the Vendor and Provider ecosystem. As part of CloudBlue’s leadership team he is responsible the organisation’s revenue and continued market leadership by delivering and supporting products, services and solutions to organizations in established and new markets around the world.

Before joining CloudBlue, Lincoln was AppDirect’s Regional Director, Asia Pacific & Japan, responsible for forming, building and leading AppDirect’s business and operations across the APJ geography. He built and led AppDirect’s fastest growing and highest performing region globally within 3yrs.

Before joining AppDirect, Lincoln was EMC’s Practice Manager, Cloud Service Providers, APJ, working with the leading Service Providers to maximise their Cloud Business presence & market success. Lincoln joined EMC in 2007, and has over 20 years’ experience in the IT industry, having been based out of Singapore, Australia and the UK. Prior to EMC, he was in range of sales and channel positions at Symantec and VERITAS.

Lincoln has an Honours degree in Business Administration from Kingston University in the United Kingdom.
Brent Clooney is the Executive Director and Associate General Counsel for Ingram Micro Inc., and lead counsel for CloudBlue.

Brent is a Canadian based corporate lawyer with more than 20 years of experience as a strategic legal advisor both in private practice and as in-house counsel to large multi-national companies. Prior to joining Ingram Micro in 2008, he worked at a well-respected corporate law firm in Toronto, Canada and later served as general counsel for Toshiba Canada. During his 15-year tenure at Ingram Micro, he has held positions of increasing complexity and responsibility, and since being promoted to his current role in 2022, Brent is the legal lead for both Ingram Micro’s Canadian and global cloud businesses, as well as CloudBlue.

Brent holds a law degree (LL.B.) from Queen’s University, a Psychology degree (B.A. Honours) from Lakehead University, and has been admitted to the bar in Ontario, Canada since 2002.
Anurag serves as the Head of Product Management for CloudBlue and is responsible for product direction and driving innovation. His leadership has been marked by a keen focus on customer needs, growing the ISV ecosystem, and ensuring the continual evolution of CloudBlue’s product portfolio.

Anurag joined Ingram Micro in 2017 and has been instrumental in, positioning CloudBlue as an industry leading monetization platform for MSP’s, Telco’s and Distributors. Previously Anurag worked at Oracle and Microsoft where he managed many technology projects and programs.
As VP of Engineering of CloudBlue, Rony oversees the development and engineering efforts of the company. He is a recognized leader with more than 25 years of experience in Technology and Product.

Prior to joining CloudBlue Rony lead the R&D efforts at Tripwire acquired by Thoma Bravo, and Cedexis acquired by Citrix. Rony is a leader with extensive experience in transforming both complex technology problems into products that customers love and disjointed organizations into agile high performing teams.
Coen is a distinguished leader and entrepreneur in the realm of cloud technology. Currently serving as CEO of Keenondots and the Global Director of CloudBlue SaaS. He is passionate about driving innovation, fostering collaboration, and leading high-performing teams to achieve transformative results.

With a background as Managing Director of INTO Cloud and a pivotal role as Director of Products of KPN, he brings a wealth of experience in steering organizations through the complexities of the digital landscape.

Beyond the boardroom, Coen is a marathon enthusiast, demonstrating endurance and discipline in pursuit of both professional and personal goals.
Alyson has over twenty years of experience in demand generation, marketing automation and data management. She is responsible for leading the strategy and direction of the company’s brand, performance, and digital marketing.

Prior to CloudBlue, Alyson served as Ingram Micro’s Director of Global Business Intelligence Marketing Automation driving channel partner campaigns. Her tenure in marketing leadership at prestigious companies such as Western Digital, Ocean Institute celebrates redefining marketing campaigns and building top performing teams based on trust, experimentation, and results.

Alyson resides with her husband and three children in Orange County and is an active volunteer and donor within her children’s sports and education programs.

Darek Tasak is leading Customer Success & Value Creation for CloudBlue. In his role, he looks after CloudBlue customers globally during the entire lifecycle of our relationship: from the initial on-boarding, through in-life account management, always ensuring they build successful businesses leveraging our technology. Additionally, he is also in charge of Partnership & Alliances, as well as Pricing Management for everything we commercialize.


Before CloudBlue, Darek managed Ingram Micro’s Services division for hi-tech customers in Europe & APAC. His prior experiences include also launching and leading pan-European services business for TDSynnex, as well as strategy consulting with Boston Consulting Group (BCG).

As President of CloudBlue, Uddhav is a distinguished leader and visionary with nearly two decades of platform-building experience. He is an industry leader in digital commerce, the subscription economy, and monetization platforms.


Notably, at SAP, he spearheaded the transformation of their platform business into a multi-cloud platform-as-a-service, offering enterprise and developer-friendly subscription models. At Pure Storage, he championed the efforts to successfully disrupt the storage industry by creating revolutionary Storage-as-a-service, AIOps-as-a-service, and Disaster Recovery-as-a-service offerings with cutting-edge features and establishing a sophisticated subscription commerce infrastructure that is channel-friendly.


At CloudBlue, Uddhav guides and empowers businesses to rethink their monetization strategies by unlocking the power of digital ecosystems and marketplaces. CloudBlue provides enterprises with a mature multi-tier, multi-channel marketplace and monetization platform that enables usage-based subscription models and global delivery of Anything-as-a-Service solutions. Uddhav has played a pivotal role in shaping the future of the subscription economy through his innovative thinking and impactful contributions.

Let's talk