The Case for a Vertically-Oriented Subscription System
This blog post will focus on the benefits of choosing a vertically-oriented billing system over a horizontally-oriented one. For simplicity, I’m going to use cloud service providers as a vertical example, but some of the same benefits could apply to say health care companies with a health care billing (or business management) system.
The first benefit of a vertical approach is the ability to do vertically-oriented billing rather than building this type of billing from scratch (and stay current with it) knowing all of the effort, expense and risk that can entail.
In our cloud service provider example, this means the ability to do turn-key billing for things such as:
- Hyperscale cloud billing with AWS, Azure, etc.
- Cloud billing with OnApp and others
- Virtualization billing
- Bandwidth billing
- Backup billing
A second benefit of a vertical approach is the ability to choose a system that offers vertically-oriented 3rd party integrations.
In our service provider example, this can mean integrations with things such as:
- Hardware used by service providers (server, networking, power, enviro, etc.)
- Vertically-oriented tax systems ideal for service providers (e.g. SureTax)
- Cloud management software
- Hosting control panels
- Domain registrars
- SSL providers
A third benefit is offered by a smaller number of vendors but can be very important. This benefit has to do with side-by-side functionality the vertical billing vendor offers beyond billing but tied to billing.
For our service provider example, this can mean:
- Quoting that accommodates service provider products, add-ons, and upgrades particularly well
- Order management that does similarly
- Device management that offers a view at all service provider infrastructure whether owned or leased, by rack view, and offering monitoring, alerting, etc.
- Support ticketing that is service provider-device, service, and customer-aware
- Customer portal functionality which is device-aware
In this case, you see an entire suite of functionality which enables a service provider to run most or all of their business, infrastructure and operations in a single, powerful, and seamless way.
A fourth benefit of a vertically-oriented billing system is often overlooked but is perhaps the most important, especially if the company mainly serves one market like service providers.
This benefit comes from a range of non-technical/non-product things. The vertical vendor:
- Deeply understands your market and better understands your products, pricing and business
- Attends your vertical events making it easier to develop trust and a stronger relationship
- Has partnerships with services/other companies that can provide joint help/support and avoid finger pointing
To summarize, the case for a vertical subscription system is strong and includes:
- Vertically-oriented billing
- Vertically-oriented integrations
- Vertically-oriented non-billing functionality
- Vertically-oriented non-technical aspects
Do you use a vertical or horizontal billing system? Do you like it? I’d love to hear any thoughts or questions that may come to you in the comments below.