More to the Point: Recurring Revenue is the Holy Grail
In 2012 Adobe launched its Software as a Service (SaaS) model, a monthly subscription fee called Creative Cloud. Today, Adobe is a Cloud Company reaping the rewards of a bold decision made by its CEO Shantanu Narayan. Transitioning to a Monthly Recurring Revenue Model (“MRR”) is difficult and takes time. The chart below tracks Adobe’s Stock Price (Symbol: ADBE) since its inception.
Adobe Stock Price August 1986 – February 2017
An analyst at Morgan Stanley recently noted “Adobe delivered yet another quarter of strong results, eclipsing our lofty expectations to put an exclamation point on a thoroughly successful fiscal year. The company continues to execute as well as any legacy software company in terms of migrating its business to the cloud, as the company ended the year with 78% of its revenue coming by way of recurring subscriptions.”
A transformational journey such as this in not without risk, however discovering an MRR model for your company is much like finding the Holy Gail. The journey is not easy, but the rewards from this sort of transformation are tremendous. Below are just a few rewards you will enjoy:
- Stability in the business model
- Time to prepare for technology shifts
- Start each year with greater certainty
- Minimize risk / Higher return on new investments and initiatives
- Easier sales management
- Stronger sales attach rates
- Higher Business Valuation
Are you ready for such a journey? Cardinal Points Group has worked with 100s of VAR businesses helping them on their journey. Whether you are a services provider trying to transition to more of a Managed Services Provider (“MSP”), an Independent Software Vendor (“ISV”) transitioning to a Software as a Service (“SaaS”), or a Value Added Reseller simply trying to incorporate more recurring revenue streams, such as Infrastructure as a Service (“IaaS”), successful business owns and leaders have utilized our MRR Challenge Tool to hone their MRR planning and execution strategies. Take the MRR Challenge now; it only takes 60 seconds to get started building your plan or provide the validation you ae seeking.
Best Wishes on your Journey