Market Overview

The subscription and billing management software market is moderately consolidated with active players, such as  Zuora, Gotransverse, Aria Systems, and Sage PLC, operating across the globe. Surging adoption of self-service payments, subscription-based business models, and video-on-demand services due to COVID-19 lockdown drive the market growth. On the flip side, increasing data breach cases due to a lack of secure solution and privacy concerns hamper market growth.

Subscription and billing software offers a digital channel for subscribers to pay for the services. Recently, the media and entertainment sector witnessed tremendous growth in online streaming subscriptions due to the COVID-19 outbreak. Additionally, the number of businesses and websites accessing these services obtain better management of their clients and subscribers. The software also offers automatic payment gateways for periodic bill payments, which can be done by linking a user’s credit or debit cards or bank account, further driving the market growth.

The subscription and billing management software market was valued at USD 2.9 billion in 2019 and is expected to reach USD 13.8 billion by 2029, with a CAGR of 16.7% during the forecast period, 2020–2029.

Transformation in Business models

The adoption of cloud-based services is expected to create a huge impact on various industry domains. This rapid adoption evolves in transforming the business models that help various domains to cope with the constantly changing market demands. In line with this, several notable technology companies, including Spotify, Uber, Apple, and Google have changed their business models from a static and linear product offering to a subscription-based model to encourage recurring, predictable, and stable revenue.

Zuora, in its recent bi-annual Subscription Economy Index (SEI), stated that the customer shift towards on-demand services has grown by more than 350% in the past seven years. For instance, Danish club FC Copenhagen introduced a subscription model in 2018, and its ticket dropout rates decreased from 10 to 3%, further driving the market growth.

Subscription and Billing Management Software Market: Segmentation

Solution Segment to Hold Three-Quarters of the Market Share

The solution segment accounted for the largest market share of more than 60% in 2019 and is projected to dominate the market during the forecast period. The solution stores payment data and processing charges automatically take care of recurring revenue such as customer subscriptions. Thus, integrating such a solution facilitates enterprises to offer enhanced customer experiences, which eventually creates brand loyalty among consumers.

The enterprises implement the software to ensure the right amount of money is being charged to the subscribers with secured payment gateways and one-time payment functionality. Furthermore, software solutions also integrate with other tools like e-commerce platforms, payment gateway software, catalog management software, and other e-commerce tools. On the other hand, the services segment is projected to grow with a CAGR of 17.4% during the forecast period.  

Increasing Number of Managed Service Providers to Drive the Cloud Segment

The cloud segment accounted for the largest market share on account of the increasing number of managed service providers (MSP) offering cloud-based services. Additionally, the seamless turnkey solution offered by a cloud-based solution drives the segment growth. Increasing partnerships between companies with and without cloud service organizations to provide cloud-based subscription and billing management software to SMEs drive the segment growth.  In 2017, Aria Systems, one of the prominent players, partnered with Fastly, the leading-edge cloud platform, to improve its customers’ experience by providing visibility and transparency of usage and consumption within its billing communications. On the other hand, the on-premise segment is expected to grow with a significant CAGR of 15.7% during the forecast period.

Large Enterprise Segment Holds Over 65% of the Market Share

The large enterprise segment holds over 65% of the market share. The large enterprises are integrating with disruptive technologies such as Machine Learning (ML) and Artificial Intelligence (AI) to focus on growing subscriber base while maximizing the revenue. On the other hand, the SME segment is expected to grow with a CAGR of 17.2% during the forecast period.

Regional Overview

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North America to Hold Over a Quarter of the Market Share

Globally, North America accounted for the largest market share in 2019 and is expected to dominate the market during the forecast period. Surging adoption of Bring Your Own Device (BYOD) and cloud-based services has resulted in the automation of the subscription process. In the U.S., increasing the adoption of mobile devices and cloud-based solutions across large enterprises and SMEs drives the regional market growth.

APAC to be exhibit the highest CAGR

Asia-Pacific is witnessing the fastest growth in the subscription and billing management software on account of the surging adoption of digital transactions and automated solution for online food services and in-app fitness solutions. For instance, in 2019, Paytm launched a recurring payment (autopay) service for merchants that are working on a digital subscription model. It enables the subscription-based businesses to collect payments from their subscribers effortlessly. The company has targeted customers using Paytm for bill payments, content subscription, grocery purchases, membership fees, and housing society payments, among others.

Key Players

• Oracle Corporation
• Sage Plc
• com
• SAP SE
• Zuora
• Digital River
• Checkout
• Aria Systems
• Chargify
• Apttus
• Amdocs (Vindicia)
• BillingPlatform
• Chargebee
• Cleverbridge
• Gotransverse
• FastSpring
• JustOn
• Zoho
• Fusebill

In the last few years, Zuora Inc. has been gaining immense traction among the industry verticals and attained rank 1 in cloud-based subscription management platform. The company emphasizes on a partnership with its technology partners, Fivetran, Sertifi, FLEXERA, Salesforce, and Oracle, to strengthen its strong product portfolio.  In 2020, Zuora Inc. partnered with Radiuz, a global Mobility-as-a-Service (MaaS) platform provider, to replace Radiuz’s home-grown billing system with Zuora billing system. The company’s subscription and billing management software speeds-up billing operations for large volumes of invoices, automatically handles upgrades, downgrades, or changes a subscription and billing.

Subscription and Billing Management Software Market Segmentation

By Component

• Solution
• Services
  • Professional services
  • Managed services

By Deployment Mode

• Cloud
• On-premise

By Organization Size

• Large enterprises
• Small and medium enterprises

By Industry Vertical

• Retail and e-commerce
• BFSI
• IT and telecom
• Healthcare
• Media and entertainment
• Public Sector and Utilities
• Transportation and logistics