Zuora’s July, '10 Release: Z-Customers can take advantage of a major improvements to our Z-Force Module and Enhanced Usability

by Clement Wang

Our regular monthly release train rolls on...

This month we are rolling out a major step-change to our Z-Force module, along with our usual assortment of improvements and new features. I’ve covered some highlights below, but for more detail on our new Z-Force click here.

Z-Force 3.0: Z-Force, our 100% native integration with Salesforce.com, has been one of our most popular features among our customer base because it provides the most complete set of functionality for enabling subscription management and billing from within Salesforce CRM. This release takes that even further by allowing users to:

• Create customer-ready quotes for upsells, amendments, and change orders
  • Sales and customer relationship managers have full visibility into customers’ existing subscriptions as they create upsell orders
  • Simple point and click interface makes modification of any subscription a breeze
  • Sales personnel and their customers can automatically see the impact of the changes including complex proration calculations across multiple charge periods and charge models
• Keep Orders Synchronized with Billing
  • One-click order activation to automatically kick off billing
  • Order and Billing status are instantly accessible to all authorized users in SFDC
• Collaborate seamlessly across sales, support, sales operations, finance, legal, and accounting teams
  • Full support of Chatter, allowing appropriate users to be collaborate on any product and price changes, changes in order status, billing, or payments
  • Internal users can view all customer subscription and billing data, including quotes, orders, subscriptions, invoices and payments

Z-Force 3.0 includes a major new upgrade of Z-Force Quotes to support Upsells and Amendments, as well as features that we previously released in June, including Scheduled Sync and Performance Improvements.

Mary Collerton, Director of Corporate Solutions at our customer Reed Business Information loves this module for its “seamless integration between sales and finance for sales quoting and order processing… driving improved efficiency within our sales teams...”

Usability: We spend a lot of time on usability, as making sure our service is intuitive and understandable is a key component to reducing user error and improving operational efficiency. This is constantly reinforced by customers when we roll out new usability features, such as our new subscription and account entry UI in January, and our draft subscription preview in May.

With this release, we have a number of features targeted at usability improvements:

• Subscription Preview on Active and Cancelled Subscriptions: Extending our draft subscription preview functionality, users can now view past and future invoices on active subscriptions. This is important as often change orders and amendments that happen mid-period often cause prorations that may not be easily calculated across charges on complex subscriptions. The preview features allows service and billing reps to have this information at their fingertips so they can see exactly what invoices will be generated across the life of a subscription.
• Expanded Subscription List View: Based on feedback from customers we’ve improved our subscription views to enhance readability. We also present the key information about subscriptions such as CMRR, Next Renewal Date, and Subscription Status to allow users to easily compare and sort subscriptions and take appropriate action.
• Improved Subscription Search: Companies use our custom fields feature to help to classify subscription for reporting and other purposes. Our improved search functionality now supports custom fields, so that subscriptions may be easily found by the custom designations assigned to them.
• Faster Payment Method Entry: We’ve added some default parameters to save users entering credit card or debit card information to cut down their data entry time by up to 70%.
• Simplified Payment API: Usability applies not only to our user interface, but to our API platform as well. We are introducing a new Payments API that greatly simplifies the process of creating payments in our system.

For more information on these new features, check out our New Feature page:
http://www.zuora.com/company/subscription-management-new-features.html

Learn more about these features and others in our new release at our Live Monthly Release Webinar on Thursday, July 15 at Noon PST. Click on the link below to sign up:
http://info.zuora.com/FY11Q2-JulyCustomerWebinar-NewFeatures.html

Subscriptions in the Mirror Are Closer Than They Appear

by Tien Tzuo

VentureBeat recently asked me to provide a C-level briefing on the shift to the Subscription Economy which was just posted today.

It was great working with VentureBeat because they just get it. We had some great creative conversations to challenge some long held conventions at the heart of this transition and just what that means to old-school product businesses that will need to adapt to new subscription models.

While drafting the article, it was truly inspiring to think about just how far we’ve come in such a short period of time. Something big is happening and it’s as big as the “no software” vision we evangelized at salesforce.com. Just look at what’s happening:

• ZipCar’s market is expected to grow to $3.3 billion by 2016, leading the company to file for an IPO.
• Cloud computing’s pay-for-what-you-use model is disrupting the 1.4 trillion technology industry.
• Newspapers and magazines are rejecting the doom-sayers and moving to online subscription and billing models.
• Software-as-a-Service is beginning to dominate the entire software industry.
• Consumers are shifting to “membership” models of music and entertainment such as Pandora and Netflix.
• Emerging telco’s such as Vonage and Open Range are changing the face of home phone services.

At salesforce.com, we had a saying that people overestimate how much change can happen in a year, and underestimate the change that can happen in ten years. The subscription economy is upon us, and before you know it, everything will have changed, again.

Zuora’s June '10 Release: Major new functionality allows Z-Customers to accurately track payment operations and improves

by Clement Wang

Once again, like clockwork, we’re pushing out our monthly release. We’re especially proud of our June 2010 release as it is the culmination of a couple of major features that we’ve been working hard on for a while now. Two of these features (our Z-Force 360 Improvements and our Payment Operations functionality) have been in preview with our lead customers who have been providing direct feedback about the features before we make them generally available. Highlights below:

Payment Operations (Refunds): Refunds and credits are a necessary part of doing business in a subscription economy. The ability to handle refunds and credits accurately and promptly are key tools for improving customer satisfaction and reducing churn. Of course, managing these properly is important, which is why our refunds functionality includes the following:

• Maintain control and financial auditability
  • Allow only authorized users to issue refunds
  • Issue and track both electronic refunds on credit card payments as well as non-electronic payments
• Respond quickly to Customers
  • Refund credit card payments directly to your customer’s credit card through a payment gateway like PayPal, or Authorize.net
• Prevent Errors
  • Intuitive user interface ensures that users know exactly what refunds they are applying
  • Internal users can view all transactions that impact an invoice including payments, refunds, and adjustments
  • Refunds can be applied across multiple payments simultaneously
• Clearly communicate to your end-customers
  • All payments, refunds, and credits that impact their balance can be made visible to end customers on their invoices
  • Refunds are fully-supported by our Z-Commerce API to allow easy access via a web-based portal.

Zuora customer TLC Innovations rolled out refunds during our preview several months ago, and had this to say: “With Zuora, we now have visibility not only into our subscriptions and income, but also into our refund requests,” said Tess March, CFO at TLC Innovations. “This helps us flag potential issues and reduce churn.”

Z-Force 360 Enhancements: Z-Force 360, our Salesforce.com integration built 100% natively on Force.com, is one of our most popular modules. Our customers use it to make sure that their front-office folks and executives who use Salesforce.com (SFDC) have a full view into their customers’ subscriptions, renewals, products, invoice status, and other important information.

With this release, we are improving our native SFDC integration to support:

• Scheduled Sync: Automatically synchronize the latest data between Zuora and SFDC to ensure users see up-to-date information
• Performance Improvements: We have greatly improved the performance of our synchronization so that customers with large amounts of data can synchronize their data in a fraction of the time that it used to take

As Willie Wang, VP of Products at Codesion stated, “Our customer teams live in Salesforce.com, so being able more easily ensure that the data they are seeing is always up to date really helps improve our responsiveness to customers.”

Invoicing Improvements: Based on customer feedback and our larger payment operations feature, we’re making more data available on our invoices to allow greater flexibility in presenting information to end-customers. For Zuora customers like Suzann Sylvester at TopCon, who have complex bills with many charge items, it is especially important to be able to control the way their billing information is presented to their customers to avoid questions and reduce errors. Among the improvements we’re introducing is a unified transactions table which shows all transactions (including payments and refunds) that have been applied to an invoice, allowing our customers to present an “at a glance” view of the exact status of the invoice. In addition, we’ve improved the sorting of charges on the invoice to make it easy for recipients to understand what they are being billed for.

For more information on these new features, check out our New Feature page:
http://www.zuora.com/company/subscription-management-new-features.html

Learn more about these features and others in our new release at our Live Monthly Release Webinar on Thursday, June 10 at Noon PST. Click on the link below to sign up:
http://info.zuora.com/FY11Q2-JuneCustomerWebinar-NewFeatures.html

Congratulations to ZipCar: Another Billion Dollar Subscription Economy in the Making

by Tien Tzuo

Our regular blog readers know we are a big fan of Zipcar. Why? Because we believe they are a poster child for the Subscription Economy. Tens of thousands of people all over North America have realized that they no longer need to buy cars -- or have to pay for gas, parking, insurance, oil changes, and get stuck with the same old car. Instead, they subscribe to Zipcar and get access to a fleet of tens of thousands of cars in all the major cities in North America. Talk about the power of rethinking your business around the service you provide, versus the product that you sell.

Well, a big congratulations to Zipcar for a major milestone -- filing an S-1 to go public.

What caught our eye, though, is the following stat. The car sharing market is expected to hit $3.3 billion by 2016. $3.3 billion. That's a lot of revenue to be siphoning away from GM, Toyota, and Volkswagen. But after we reported that we shifted over $1 billion in our first quarter to the subscription economy, we can't say we're really surprised.

Zipcar's announcement also got us thinking: could the $3.3 billion estimate actually be too small? Could a big auto manufacturer reinvent itself as a major player in the car subscription market? We don't think that idea is too farfetched. Just look at BMW. Whether they realize it or not, BMW already has one foot in the subscription economy. In 2008, over 60% of BMW's revenues came from its leasing business. When you lease a BMW, you pay a one-time set up fee, and then a monthly fee over the life of the contract, the amount changing depending on how many miles you commit to driving each month. Oil changes and maintenance are included in that price. That sure sounds like a subscription business.

But when you compare BMW to Zipcar, it just doesn't match up. With Zipcar, I might drive a Toyota Matrix one day and a Mazda the next. If I'm a BMW lease customer, why can't I switch from a 3 Series to an X5 for two months, and just pay the difference? If I'm out of town, why couldn't I pick up a BMW for a few days from the local dealer? And why do I have to commit to driving 36,000 miles over the 3 years, and get hit with enormous overage charges if it turns out I drove too much?

These differences highlight the big challenge that some old-economy companies will face as they move to a subscription model. It’s not about slapping a new pricing label on your offering. Sometimes, it takes a fundamental rethinking of your business. Could BMW shift their entire sales model to the subscription economy? Or what if BMW bought Avis? Now that would be interesting...

Our First $1 Billion Quarter

by Tien Tzuo

This morning, we announced that we signed up over $1 billion in contracted annual subscription revenue in our first quarter, which ended April 30th. Zuora also announced more than 100% quarter-over-quarter growth across all key performance dimensions. And that’s on top of 300-400% year-over-year growth for our last fiscal year.

But why is the $1 billion figure so significant? Think about it for a second. In one quarter, businesses just shifted $1 billion of revenue capture from traditional business models to what we at Zuora have been calling the Subscription Economy.

Just what is the Subscription Economy? Well, from SaaS to Cloud to Online Media to Mobile applications, we all know that the world is moving to a digital economy. But with that shift comes a change from a product-oriented mindset to a services-oriented mindset, and from a traditional product-centric business model to a subscription-based business model. That’s what we call the Subscription Economy.

Our $1 billion quarter represents a huge milestone on the road to the Subscription Economy. When we launched Zuora in the summer of 2008, no one else gave subscription billing much thought. But it was clear to us that—from ZipCar to NetFlix to the Google Apps to Chegg—the world was moving to a subscription model, and the need for subscription billing was poised to explode.

And when you’re in the right place at the right time with the right idea, it’s amazing what you can accomplish. First came salesforce.com. Marc Benioff and his team—of which I was an early member—saw that the world would inevitably shift to a software-as-a-service model. We introduced SaaS, and quickly grew beyond our startup roots to compete head-to-head with the giants of the CRM industry—and win.

Now it’s happening again. We set out to define and lead a new, world-class subscription billing industry, and that’s just what we’ve done. We’ve hired a world class team, with recent additions to such as President and GM Shawn Price, VP of Customer Operations Elizabeth Tse, and VP of Professional Services Steve Martello. We’ve expanded into new markets, like Telecom, and new regions, like Germany. We’ve delivered substantive updates to our product every month for 17 months in a row—a track record no SaaS vendor can match. We’ve achieved compliance with key standards like SAS70 Type II and PCI DSS. And we’ve maintained 99.99 percent uptime for five straight quarters.

And we’re far from done. With the industry’s rapid growth filling our sails, and as we continue to execute on our vision, the best is yet to come. Subscription billing isn’t just the wave of the future—it’s here today. And Zuora is now the company to beat.

Zuora’s May '10 Release: New Features Gives Z-Customers Improved Usability and greater power across all the entire product line

by Clement Wang

Another month, another Zuora release - this month's release is chock full of new customer-driven features. Highlights below:

Subscription Preview: Subscriptions can be complicated, especially if you have complex usage charges (like our customer LiveOffice), deal with non-standard subscription terms, or prorations. If you’re not careful, you’re invoice may not match the expectation that your sales team has set with your customers. Our Subscription Preview feature is designed to eliminate entry error and allow users to tell exactly what the invoices will look like before the subscription is locked in. Users may enter pro-forma usage data, and preview across the whole subscription or only a select number of periods where they are most concerned.

Product Catalog API Improvements: Our industry-leading Z-Commerce API platform set is one of the our key advantages, and with the May release, we continue to enhance our API’s by adding greater control and visibility into the Product Catalog. This is especially important to Roland Flanagan of Online Marketing Group (another of Zuora’s customers), who will use the new features to allow their customers to dynamically add one-time or recurring charges to existing subscriptions.

Improved Payment Interface: We take a lot of pride in the fact that our user experience is best-in-class in our space. Along these lines, we continue to evolve based on feedback we hear from customers – this time from dozens of user tests from a broad cross-section of our customer base. With the May release, we’ve overhauled our payment entry interface, defaulting key data to the 90% use case, so that in most cases payments can be entered with a single click. This overhaul will also pave the way for our expanded payment operations functionality that we’ll be introducing over the coming months.

API Access to Subscription Charge History: We’re proud of our robust subscription model, as it’s the only one that tracks the entire subscription lifecycle, including the initial subscription order, and any amendments or changes that occur during the life of a subscription. In a subscription business, these changes are important as they will typically represent upsells, and an increasing relationship with your end-customer. With the May ’10 release, we now expose the entire subscription charge history to allow calculation of the value of a subscription at any point in time. Ben Saren of Citysquares.com will use this to calculate today’s MRR, which represents the current monthly recurring revenue net of any changes that may take place in the future.

Support for Processing ACH Payments vis Chase/Paymentech: This feature was requested by several of our customers, including Robert Maynard of PrivacyMaxx. Being able to offer flexibility in the types of payments you accept from your customers can be a key differentiator, and to that end, we’re enhancing our support for Chase/Paymentech to allow processing of ACH, or electronic check payments. Ask and we shall deliver – look for some additional payment processing functionality to come in the next few months as well!

For more information on these new features, check out our New Feature page:
http://www.zuora.com/company/subscription-management-new-features.html