Its been a year since we released our first Subscription Economy Index (SEI), our landmark report that tracks the rapid ascent of the Subscription Economy. The SEI is based on anonymized, aggregated, system-generated activity on the Zuora platform, reflecting the growth metrics of hundreds of companies around the world and across a wide range of industries.
Recurring revenue-based business models are not new, but they have exploded in recent years with the proliferation of cloud-enabled, pay-as-you-go services. As globalization has placed increasing margin strains on manufacturing and product sales, subscription-based businesses have benefited from stable and predictable revenue projections, data-driven insights from direct consumer relationships, and large economies of scale as a result of relatively small fixed costs.
Gartner predicts that by 2020 more than 80% of software providers will have shifted to subscription-based business models. In addition, IDC predicts that by 2020, 50% of the worlds largest enterprises will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences.
In the 10 years since we first starting saying that the world was moving to the Subscription Economy, weve seen that vision realized. Now were seeing that the Subscription Economy has become the engine thats driving economic growth.
This latest SEI reinforces this point. Since the first SEI in 2016, the number of companies in our study has increased, the sets have grown, and we have more geographic and vertical insights. The SEI is validation that, in the future, all growth will come from subscriptions.
In the first anniversary SEI report, Zuora Chief Data Scientist Carl Gold shares key findings, including:
Download the full report for growth strategies and detailed key metrics on: