The Rise of the Subscription Economy Index

By Aarthi Rayapura November 15, 2016

Frequent visitors to this space know we’ve been quite chatty on the upward trending subscription business model, and the impact of that sector growth on revenue management in general and the need to process high volumes of transactions.

Our partners at Zuora have recently launched a Subscription Economy Index, tracking revenue growth of subscription businesses, and the results back up this continued northbound trend, as reported in Forbes.

The index, based on 353 businesses live on Zuora’s platform for a minimum of two years, shows sales of subscription economy businesses are growing at a rate nine times faster than sales of companies in the S&P 500 and four-fold the rate of U.S. retail sales since 2012.

“We could feel that there seemed to be this tipping point in the subscription economy, but we never had any data to prove it,” said Zuora CEO Tien Tzuo in the Forbes article. “Now we can show that the economy is shifting.”

Zuora’s index calculates annual recurring revenue of subscription companies based on a backward-looking total of invoices to help make it comparable to other revenue benchmarks. The company intends to update its new index quarterly.

Other interesting tidbits to come out of the index results: business-to-business enterprises grew at a faster rate than consumer-based counterparts, 22% growth to 16% growth. Also, companies with revenue of $100 million or more saw the biggest jump in growth.

Leeyo Software is proud to be a part of the subscription economy community at Zuora Subscribed London 2016 on November 15. Please pay us a visit if you’re in the area!

To read the full Forbes article on the Subscription Economy Index, visit here.

You can download a free copy of the latest joint offering by Leeyo Software and Zuora, the white paper, “Ramp Up to the New Revenue Standards in the Subscription World.”