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Monday, Apr 23rd

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MGI Forecasts: Agile Monetization Platform (AMP) Software 2018-2022

We updated the MGI Forecast of the total addressable market (TAM) for Agile Monetization Platform (AMP) software from 2018 to 2022. 
 
This latest forecast contains world-wide annual estimates of spending on software that falls into AMP categories such as Financials, Billing, Revenue Recognition, CPQ, CRM, Order Management, Contract Lifecycle Management (CLM), E-Commerce, Mediation. The report also details growth rate, breakdowns by AMP categories, geographies, economic sectors, analysis of market size based on company size, impact of Internet of Things (IoT), Digital Transformation, and company growth and technology spend profiles among others. The scope of the data has been expanded to include estimates and annual forecasts for both cloud-based AMP software as well as the corresponding legacy on-premise software solutions. This MGI Forecast details the total potential spend in each category and across AMP as a whole.
 
The term Agile Monetization was introduced by MGI Research in 2015 and originally evolved from a concept of Agile Billing pioneered by MGI Research in late 2013. In the monetization context, agility refers to ability to create and evolve new offers by iterating rapidly, thus accelerating velocity with which a business can bring new product offers to market.
 
Business Context
The very nature of competition today is changing radically. Product innovation and growth opportunities are only bounded by the imagination. Once-protected pools of profit are now at-risk. Product cycles and market opportunities come and go in less than five years – with the majority of benefits accruing to a limited few. Organizations of all sizes want greater transparency and control in their business relationships. The demand for custom pricing models and flexible terms is counter-balanced by the challenges of delivering these capabilities at scale.
 
Across most key world economies, the number and complexity of regulatory and audit requirements are mounting while the timeframes to reach compliance are getting shorter. Against this rapidly accelerating backdrop, product innovation and revenue optimization are the key levers for growth and profitability. In the face of these opportunities and threats, progressive organizations are focusing on key processes and new monetization tools to sharpen their edge.
 
Increasing regulation, digital disruption, activist investors and ever-demanding customer needs are pushing legacy IT systems and processes beyond their capacity to respond to these new requirements. Individuals and businesses alike want to consume services and not just purchase products. Customer preferences for pricing models, personalized quotes and contract terms, and payment modalities are changing rapidly. Subscriptions, demand-based price models, pay-per-use, and increasingly complex enterprise agreements with a litany of unique entitlements now are the norm. Technology disruption accelerates the demand for these new pricing models, and it is everywhere – from the Internet of Things (“IoT”), to autonomous vehicles, artificial intelligence, and digital disrupters like Netflix, Airbnb and Uber. Fortune 10 companies and the corner store alike are not immune to this revolution.
 
Reacting to these new business needs, organizations are looking to revamp their core business systems, particularly in the area of monetization.
 
Monetization as a Strategic Capability
 
Monetization is how efficiently and effectively market demand is created and translated into revenue, profits, and competitive differentiation.
 
The process of monetization reaches across the entire organization – from product development, marketing, sales, finance, billing and customer support, literally from the back office to the front office and into the customer and supplier ecosystem.  Monetization is not a single product, but a business discipline that combines business processes, tools, and skilled human resources to efficiently and effectively create and translate market demand into revenues, profits, and competitive differentiation.
 
There are multiple business and technology drivers for investment in AMP solutions. AMP is one of those all-season markets with solid demand in good times and bad. In periods of economic expansion, AMP enables companies to launch products faster and accelerate time to revenue while increasing customer success and satisfaction. In periods of relative economic weakness, AMP is no longer a nice to have, but an essential business tool accelerating the order to cash cycle, reducing DSO, and enabling more granular (and efficient) product offer management.
 
In our research and advisory practice, we have seen clear evidence of companies prioritizing investment into AMPover other, more traditional business applications areas.
 
Forecast
 
The market for Agile Monetization Platform (AMP) software represents a new, large, expanding all-season opportunity with a total addressable market (TAM) exceeding $172 billion from 2018 to 2022. MGI Research expects AMP spending to rise from $19 billion in 2018 to over $55 billion in 2022. The key drivers of growth include the shift to new business models based on recurring and or usage based pricing, increased impact from adoption of Internet of Things (IoT), regulation, the ability of vendors to reach previously un-served buyers, and the push to automate (“digitally transform”) the enterprise. The economics and agility of cloud computing solutions are also stimulating migration of workloads from traditional on-premise software solutions to cloud-based AMP options.
 
Leading organizations primarily in North America are already making the move to AMP today and they comprise the bulk of the spending currently underway. Over the next 24 months, geographic markets beyond North America will accelerate, and fast-following firms and middle of the road organizations in North America will ramp up spending on AMP. Given the critical nature of AMP – it effects top-line growth, profitability, and customer satisfaction – it is one area of technology spend that is being prioritized. This report analyzes the key market drivers and dynamics that are fueling the growth in AMP investments, and details the geographies, sectors, and vertical industries that are most impacted by major trends like IoT (“Internet of Things”), and the adoption of subscription business models.
 
TABLE OF CONTENTS
(61 pages) 
  1. Executive Summary 
  2. Introduction 
  3. Key Business And Technology Drivers
  4. Regulatory Compliance 
  5. Stepping Into The Future – Automation, Renovation, And Transformation
  6. Customers Of All Sizes 
  7. Top Symptoms of Need For Agile Monetization
  8. Key Elements of An Agile Monetization Platform (AMP)
  9. Who Are The Buyers Of AMP 
  10. Who Within An Organization Benefits From AMP?
  11. Functional Overlap 
  12. Forecast Scope, Assumptions And Methodology
  13. AMP Total Addressable Market (TAM)
  14. Legacy Total Addressable Market
  15. AMP Annual Forecast 
  16. AMP TAM Geographic Segments
  17. Top 10 Countries For AMP TAM
  18. AMP TAM Top Sectors 
  19. Impact Of Growth
  20. Impact Of Technology Adoption Style
  21. Impact Of Digital Transformation
  22. Impact Of The Internet Of Things (IoT)
  23. Impact Of A Shift Towards Subscription Business Models
  24. Agile Billing Market Forecast
  25. Cloud Contract Management Market Forecast
  26. Cloud CPQ Market Forecast
  27. Cloud E-Commerce Software Tools Market Forecast
  28. Cloud Financials Market Forecast
  29. Cloud Order Management Software Market Forecast
  30. Cloud Revenue Recognition Software Market Forecast
  31. Cloud Customer Service Software Market Forecast
  32. Summary 
  33. Appendix: AMP TAM Forecast Assumptions And Stats
LIST OF FIGURES
Figure 1 - Current Business Environment
Figure 2 - Business Model Gap
Figure 3 - Symptoms Of Need for Agile Monetization
Figure 4 - Rethinking Enterprise Systems
Figure 5 - Select AMP Elements
Figure 6 - AMP Benefits 
Figure 7 - AMP TAM Forecast Breadth
Figure 8 - AMP TAM Forecast Depth
Figure 9 - Forecast Core Assumptions
Figure 10 - AMP TAM
Figure 11 - Legacy Monetization Software TAM 2018-2022
Figure 12 - AMP Annual Forecast
Figure 13 - AMP Geographies
Figure 14 – AMP Categories & Regions
Figure 15 - AMP Key Countries
Figure 16 - Top 10 Countries For Legacy Monetization Spending
Figure 17 - AMP Key Sectors
Figure 18 - Top Segments Within Sectors And Company Sizes
Figure 19 - AMP By Company Size
Figure 20 - AMP TAM By Growth
Figure 21 - AMP TAM By Tech Adoption Style
Figure 22 - AMP TAM By Digital Transformation
Figure 23 - Characteristics Of A Digital Enterprise
Figure 24 - AMP TAM By IoT Impact
Figure 25 - Impact Of Subscriptions On AMP Spend
Figure 26- Agile Billing AMP TAM Forecast 2018-2022
Figure 27 – Cloud Mediation Software TAM Forecast 2018-2022
Figure 28 – Cloud Customer Service Software TAM Forecast 2018-2022
Figure 29 – AMP TAM Source Data: Sectors And Industries
Figure 30 – AMP TAM Source Data: Regions And Countries
Figure 32 - AMP TAM Source Data: Total Revenue
Figure 33 - AMP TAM Source Data: Average Revenue
Figure 34 – AMP TAM Source Data: Growth Distribution
Figure 35 – AMP TAM Source Data: Average Revenue Growth
 
About MGI Research 
 
MGI Research is an independent industry research and advisory firm focused on disruptive trends in the technology industry. The firm was founded in 2008 by a group of senior analysts and executives from firms such as Gartner, Soundview and Morgan Stanley. MGI is the only firm with a dedicated practice around agile monetization, including billing, CPQ, financials, and revenue recognition. 
 
Through its research, ratings, forecasts, advisory engagements, industry studies and conferences, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks. 
 
MGI Research analysts typically have over twenty-five years of tech industry experience as IT and/or vendor executives, CIOs, Wall Street professionals, management consultants, and/or academics. 
 
MGI Research emphasizes the application of highly quantitative and structured methods in creating decision support frameworks for its clients. MGI has built a number of proprietary industry metrics, benchmarks, and indices such as the MGI 10KScore, MGI Cloud30 Index, and the MGI 360 Ratings among others.
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