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MGI 360 Ratings - PROS in Configure-Price-Quote (CPQ)

MGI 360 LogoSUMMARY: We initiate coverage of PROS in the Configure Price Quote (CPQ) market with an MGI 360 Rating of 53 and a Neutral outlook.

OPINION: PROS CPQ solution is focused on medium and large businesses ($500M+) with highly configurable products and complex business and pricing models. Their Smart CPQ Solution is used by approximately 25%-30% of their customers (275+ out of 1000+). PROS Smart CPQ is one of a handful of CPQ solutions that can combine AI/ML-based price optimization with a product configuration engine that can handle complex products. We view PROS as very well positioned in its core target market of complex discrete manufacturing, logistics and others. As a company, PROS often leads into new accounts with price optimization, a strong set of technical capabilities, deep bench of AI/data science experts, rich data and a loyal customer base. Yet, the product is complex to implement, has a below average ecosystem and PROS is challenged in reaching sales channel efficiency as well as consistency in growth and profitability. 

USE CASE: Use Case: Medium to large firms seeking CPQ solutions to support complex pricing optimization and CPQ requirements, especially in discrete manufacturing, transportation/logistics, commodities, chemicals & energy.

COMPANY DESCRIPTION: PROS Holdings, Inc (NYSE: PRO) provides Pricing Optimization and CPQ solutions to support omnichannel commerce for medium and large global organizations. PROS emphasizes Big Data and AI-based predictive and prescriptive capabilities for dynamic pricing, configuration and sales of physical and digital products and services across all sales channels. Since 1985 PROS evolved first as an airline price optimization solution and later expanded into other industries and capabilities such as CPQ, while also transitioning from on-premise to SaaS deployment. PROS is a global company with around 1,400 employees based in three main offices in the US, UK and Australia.

COMPETITORS: Apttus, Oracle, SAP SE, ExperLogix/E-Con Solutions, Cincom, Vendavo, PriceFX

ABOUT MGI 360 RATINGS

MGI 360 Ratings is a comprehensive system for evaluating technology companies. IT organizations use MGI 360 to track suppliers, assess purchasing risks and identify promising new vendors. Vendors utilize MGI 360 to track their markets and evaluate partners. Institutional investors use MGI 360 for independent assessment of tech companies. MGI 360 ratings help lower costs, save time, reduce risks, and identify new opportunities.

The MGI 360 ratings are on a scale from 0 to 100 and reflect company opinions of MGI analysts in five key areas on a scale of 0 to 20:

  • PRODUCT: How strong is the product competitive position
  • MANAGEMENT: How competent and experienced is the management team
  • CHANNELS: Does the company have a sales capability and channels needed to bring products to market?
  • STRATEGY: Does the company have a realistic view of the opportunity and a compelling strategy for success?
  • FINANCE: Is the company growing and profitable

Each of these key criteria is subdivided into numerous sub-categories. In total, over 149 criteria are combined to generate an MGI 360 rating in each specific market space. Companies can have one or more MGI 360 rating - one for each market. MGI 360 ratings are revised as important developments occur. While the MGI 360 rating process is comprehensive, this scoring system is not meant to be a predictor of company solvency, liquidity, absence of accounting fraud or stock performance. Access to MGI 360 Ratings is by subscription.

ABOUT MGI RESEARCH

MGI Research is an independent industry research and advisory firm focused on disruptive trends in the technology industry. Through ratings, industry benchmarks, best practices groups, subscription research, market forecasts, advisory engagements, industry studies and conferences, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks. MGI Research analysts work closely with business and technology organizations to help make timely go/no-go IT investment decisions, optimize vendor relationships, and create practical strategies for new initiatives in agile billing, payments management, order management, CPQ, contract lifecycle management and other elements of agile monetization platform (AMP).

For additional information on research coverage of Configure-Price-Quote (CPQ), please see Key Issues in CPQ Research.

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