Brendan O’Brien has been in the subscription services business for over 20 years and is recognized as a pioneer and thought leader. It’s fair to say that he introduced the world to cloud billing and innovated database-driven, enterprise-grade Web applications for companies ranging from Medical Manager, to Wright Express, and LaserLink. All this before the concept of “cloud” was even on the horizon. The product architecture he designed for Aria in 2002 is the culmination of that experience; it’s an infinitely flexible and scalable billing solution that can be adapted to any industry or vertical. Aria’s leadership today confirms Brendan’s original vision.
Enterprises are embracing recurring revenue business models to drive revenue predictability and customer loyalty. However, this shift requires that businesses look beyond billing and payment management to better ways of managing the overall relationship with their customers, or else risk lost profits and reputational damage. Moreover, a monetization engine is also fast becoming critical for businesses in order to get on the Internet of Things (IoT) bandwagon – and profit from it.
Some are predicting IoT to be five to 10 times more of a phenomenon than the Internet. In 2010, there were more than 10 billion connected devices, and now, in 2014, they outnumber the number of people on the planet – and the tipping point is yet to come. But the killer app for the IoT will be monetization, driving the IoT to new heights. This monetization engine is one of the main ingredients that will fuel the IoT revolution because people like being “connected,” businesses like repeat customers, and consumers like flexibility in how they pay for products or services. And that is big business – to the tune of $1.9 trillion in global value, according to Gartner Research.
Jennifer Lynn recently interviewed Brendan about his current role at Aria Systems and insights on the industry. Here’s a summary of their conversation.
Jennifer Lynn: Hello, Brendan. Could you tell us more about your current role as the co-founder at Aria Systems?
Brendan O’Brien: It’s been an interesting journey. I started out being the sole author of the system, moved on to running the engineering team as a whole, [and] then running our product management team. At this point we’ve brought in phenomenal industry heavyweights to manage engineering and product for us, and they’re doing an incredible job. That’s allowed me to move on to a more theoretical and thought-leadership-focused role as chief architect, which means I get to focus on analysis of industry trends while providing inward-facing guidance to those teams, to speak and write at length on our product and company and market, and to assist our sales organization through the lengthy and technically complex sales cycles our enterprise prospects require. For a relatively young but quickly growing company in a relatively young but quickly growing market, that’s critical stuff and I’m thrilled to be able to be dedicated to that.
Jennifer Lynn: What are your initiatives?
Brendan O’Brien: We’ve got lots of cool stuff coming this year. We’ll be further expanding our partnerships with (and integrations to) various systems that are adjacent to the core billing space, doubling down on our already-significant investment in functionality that supports complex, multi-layered, many-to-many billing models; continuing to build out the capabilities of our “whatever you can dream up” business process automation system; and deepening our offering in the revenue recognition space. We have a few other tricks up our collective sleeve as well, and understandably want to play some cards close to the vest in a highly competitive market, but suffice it to say that in general IoT/IoE is at the forefront for us and we are ready. We feel a bit like “we built it and they are coming,” Kevin Costner in Field of Dreams after he finished the baseball diamond, but there’s no one resting on their laurels here.
Jennifer Lynn: What are some key capabilities which you may view as necessary for getting the maximum return from a recurring revenue business model?
Brendan O’Brien: At the end of the day, what makes recurring revenue management fundamentally different from one-time purchase models is the need to focus on effective customer retention and mitigation of “revenue leakage” (the inadvertent giving away of unpaid service). And the primary ways, technically, that a system like ours can support those objectives is by supporting a class of operation/integration/interoperation that is tighter and cleaner than what one can ever get from an inherently passive API, which is often the only tool provided by other systems for getting stuff done.
So, at Aria, we’ve always focused on three sets of tools that enable this higher level of function: Our push-based event model that manages M2M broadcasts of critical data-state changes to external systems, a broad and granular ability to configure truly automated in-the-box actions for “lights out” billing and customer management functions, and our nearly infinitely configurable rules-based business process automation layer for the encapsulation of proprietary business functions. In concert these capabilities ensure a “the world is your oyster” platform that is absolutely required if one wishes to enable the vast and disparate array of needs enterprises have for their different billing, customer care, selling, and reporting models.
Jennifer Lynn: How do you see organizations further evolving in the future with IoT?
Brendan O’Brien: There’s going to be an enormous focus on support of highly complex, usage-consumption-based monetization capabilities. We’re already seeing enterprises shifting away from solutions that really only support a pure subscription style of billing, that traditional Silver v. Gold v. Platinum “all you can eat for a flat monthly fee” model, and that shift is moving swiftly. Not that there’s anything inherently wrong with the simple subscription billing model … it’s great for plenty of stuff.
But if IoT is about one thing, it’s usage data. Even the most innocuous devices will be producing massive streams of data, and as you go further up the device food chain, we’re talking about devices producing data streams on the order of terabytes-an-hour. This is obviously important if your monetization model includes any elements of consumption-based billing, but even organizations that continue to opt for a flat-monthly-fee monetization approach need billing systems that are capable of processing and centralizing all of that usage data for analysis purposes alone. Product managers just can’t do their job effectively without the ability to compare consumption to revenue, let alone to retain the flexibility to bill directly for consumption, should they choose to.
Jennifer Lynn: What trends have you seen in the subscription services business?
Brendan O’Brien: Obviously there’s been a huge and welcome gravitation over the last couple of years toward subscription selling. But what’s starting to change is the understanding that if all you can do is “subscription,” it’s ultimately a limiting way of going to market, for two reasons. First, as I just mentioned, organizations are demanding ever-more-nuanced options for monetization, such as complex usage/consumption models which quickly break the boundaries enforced by simple subscriptions. Second, the realization that a properly implemented billing system really needs to be much more than just a “billing system,” and more like the hub of an eco-system that acts as the active corporate master for everything you offer to the market and everything about your customers.
Just a few years ago we would, more often that not, initiate discussions with prospects who had already drawn up their system topographies before engaging with us, and we’d see an “insert billing system here” box at some downstream slave location. Today, more often than not, they are coming to the table with a much more hub-and-spokes design in their heads and the expectation that a system like Aria’s will be that hub. That’s great for us, as we don’t really need to evangelize for that kind of model any longer… the market is maturing on that point rapidly and they already get it.
Jennifer Lynn: Is there anything else you feel Android users and the Android market should know?
Brendan O’Brien: The promise of IoT/IoE will be fulfilled when, among other challenges, the challenge of providing a standards-driven interoperation bus for IoT is solved. I’m excited about the work being done by Cisco and their Cisco One platform, and the AllSeen Alliance’s AllJoyn open source project, not to mention the exciting possibilities provided by new programming paradigms like the amazing Wolfram language.
These initiatives promise to make it easier and easier for developers with killer IoT app ideas to get to market quicker than ever before, and Android is obviously perfectly positioned as a delivery mechanism for those apps. But I caution those developers to condition themselves to think early and often about their ultimate monetization strategies rather than tacking monetization concerns to the bottom of their to-do lists. And when they do consider monetization, to do all they can to keep their options open because monetization itself is often a market differentiator, sometimes more so than the core service they are offering. To stay ahead of competitors, they’re going to have to know they can easily and quickly gain real insight into their users’ habits and adjust their monetization strategy accordingly (and, again, quickly!), else risk premature obsolescence.
We would like to thank Brendan O’Brien for taking the time for this discussion and Aria Systems.
Bringing the IoT into the enterprise isn’t only an issue of upgrading your tech, but also upgrading your people’s knowledge, flexibility and speed. Learn How to Rewire the Organization for the Internet of Things.