Zuora Gives Back

by Megan Golden

When I made my transition from Salesforce.com to Zuora in early 2008, I had hoped to bring with me the spirit of giving back that is core to Salesforce's working culture. What was surprising, however was that I landed at a company where several others shared that same vision!

That's why it was so easy to rally our team for a couple of hot days to put down their Blackberries and fasten their toolbelts for Habitat for Humanity. Mind you, this was the last week of our quarter and we even got our sales team out there!

In two separate all day sessions we put our brains and muscles to work on a housing project in the Bayview area of San Francisco. Some of us hung siding and fastened beams and some of us just looked good in a hard hat - c'mon you need at least one of those on every construction site, right?

The Habitat for Humanity and Americorps teams were truly a dream to work with. I mean, not everyone can be gracious with the’ I've-Never-Picked-Up-A-Hammer’ crowd, as well as the ‘I-Know-It-All-When-It-Comes-To-Handy -Work’ set. I’m not telling you which category I fall into.

But really, what they do for communities all over the US is no doubt inspirational. Over and over again they hand over new beginnings to deserving families; pulling communities together through leadership and team work.

We’ve all experienced our share of corporate team building exercises from trust walks to scavenger hunts to walking across hot coals (ouch!), but nothing compares to the camaraderie developed by working together to actually build something of real value – and for a deserving member of our community no less.

Once again, I've found myself at a company that not only values giving back but views projects like this as a corporate responsibility. There are multiple reasons why I love working at Zuora, but this is a biggie for sure.

If you’re interested in joining Zuora, check out our Careers page.

Subscription Revenue Models Take Center Stage

by Tien Tzuo

Open Table’s success is a feather in the cap of subscription businesses and tangible proof that ad-driven revenue models are rusting. The New York Times really hit the nail on the head when it wrote: “Now advertisers have cut back their online spending. So Web start-ups are searching for new ways to make money, like selling real, or virtual, goods or asking customers to buy subscriptions.”

But, it’s not just Web start-ups that are moving to subscriptions. Traditional ad-supported businesses like newspapers with online content are offering more subscription pricing and packaging as well. Ads don’t work anymore and companies are moving beyond them. Subscriptions, tiered pricing and premium content are taking center stage.

Wired Magazine is talking about "raising the price or straying from the traditional magazine business model with ideas like tiered pricing with different benefit.”

Even Rupert Murdoch is distancing News Corp from ads. As Murdoch recently said to CNN.com, "the challenge for media organizations (is) finding a balance between advertising and subscription revenues and figuring out how to charge for content without alienating existing users–which could lead to Web sites offering tiered levels of free and paid-for material."

It’s exciting to have subscriptions in the national spotlight. Of course, here at Zuora, we and our 100+ customers already know that subscriptions are the way to go. We trust that more companies will begin to evaluate subscription-based revenue streams, especially in light of OpenTable’s success.

A big congratulations to our friends at Open Table (a fellow Benchmark company). Jeff Jordan and his team have built a great company and the market certainly agrees with us.

Zuora Wins 5 Industry Awards

by Annette Giambroni

We’re in the running for several awards in the technology community, and in the past week, we’ve already earned 5 software industry accolades. Here’s the scoop:

• At Under the Radar, Zuora won top honors amongst hundreds of companies with a total of three awards, including Best in Show. Check out CEO Tien Tzuo’s presentation.
• In JMP Securities’ list of The Hot 100, Zuora is listed as one of The Best Privately Held Software Companies. Read more in our announcement.
• Zuora was chosen from more than 1,000 eligible companies and made it through two rounds of elimination to reach the Red Herring 100.
• Zuora is honored in the Beagle Research’s annual WizKid Report.
• Zuora beat out over 1000 companies to enter the final round of TiECon50.

Cloud computing is hotter than ever. But companies need Zuora to make money in the cloud. These awards validate our success and vision, and we’re excited to see them roll in week after week!

Will the Public Sector Embrace Cloud Computing?

by Tien Tzuo

Recently, I came across an interesting headline in the Washington Post, “Government Turns Again To Cloud Computing”. The article begins: Skeptics take note: Cloud computing is taking hold.

The Pentagon has awarded another contract for cloud computer -- which, roughly speaking, involves putting software tools on the 'net and delivering them to users only when needed.

I’m not surprised. At salesforce.com, I had a ring-side seat to watch all sectors- including government- embrace the SaaS model to reach their goals. Salesforce.com’s customer list already boasts a wide range of federal, state, and local government customers. Why? Besides the obvious benefit of reducing IT costs, cloud computing deploys fast, is easy to use, and it scales.

Karen Evans, a top official for the Office of Management and Budget (OMB), is pushing for greater government adoption of SaaS to cut development costs. According to InfoWorld, Karen says that the U.S. government needs to move to a more service-oriented software model.

Of course, we’ve heard concerns from the public sector over security in the cloud. But in my presentation at SaaS Gov 2007, I shared the facts that government and education sectors accounted for over half of all data loss events in 2006—and the majority of these were due to lost or stolen property. At salesforce.com, we saw corporations trusting their most sensitive applications and data to a Web-based service provider. Government Computer News reported that, “if corporate America can trust these types of applications to an outside service provider, the federal government won’t be far behind.” With a new line-up of SaaS champions tooting the cloud computing horn in Washington, I believe the trend is accelerating.

In the last month, newly appointed Federal CIO Vivek Kundra acknowledged that rolling out government-wide common IT services will pay off in the long run. Kundra has been a proponent of cloud computing in government since his days as the CIO of Washington, D.C., where he deployed Google Apps to all city employees. In fact, Information Week reports that the Federal government is moving its information portal, USA.gov, to a cloud computing infrastructure this month.

More momentum: Aneesh Chopra, former Secretary of Technology of Virginia, recently assumed the post of Federal CTO. The state of Virginia has a well-known reputation for advanced technology adoption. In fact, Arlington County is one of salesforce.com’s largest customers. Thanks to the power of cloud computing, Arlington County deployed a custom CRM system in just 3 months. Now field employees have direct access to data that was locked on employee PCs and individual servers. Arlington County represents the future of government in the cloud. As for me? I’m thrilled the top IT leadership in government is ready to go to the cloud.

Who needs a subscription management and billing solution?

by Amy Pruitt, Zuora Account Executive

Why do I need a subscription billing system when I already have an accounting package?

On the front lines here at Zuora, this is a question that comes up from time to time when speaking with prospective client CFOs and COOs. Maybe you’re asking yourself the same thing. Put simply, accounting and billing systems manage two different worlds in the business; so an effective accounting system doesn’t guarantee an effective billing system. Just how are billing and accounting systems different?

• Accounting systems record revenues and expenses after they happen. A subscription billing system is where your product catalog, customer subscriptions, and all change orders and amendments are housed. This is where you group features into various packages and rates plans, allowing you to offer customers the level of service they want at a price they can handle, based upon their individual needs.
  
  
• The accounting world revolves around debits and credits and requires business events to work around it. Billing, on the other hand, is built around the business events that drive the flow into accounting: customer acquisition, provisioning, pricing, usage tracking, calculations, invoice generation, collections, etc.
  
  
• An accounting system stores the charge after it has been billed; whereas a billing system looks at the customer’s subscriptions, including all change orders and amendments, and calculates what the bill should be, e.g. prorations, upgrades, downgrades, etc.
  
  
• Accounting will generate a balance sheet, but falls short when it comes to generating key subscription metrics like MRR, churn, renewals, etc.

So, let me pose the question:

How important are money and growth to you, right now?

The answer you give to that question indicates whether or not you should invest in a subscription management platform on top of the accounting package you already have.

If you said, “It’s about cash. Darn it! It’s about fueling the growth of my company by enabling my product, marketing, and sales teams to position and capture as much market share as humanly possible – right now, today! And, I want a system I can leverage in the day to day operational complexities of my business.”

Then, I would respond, “You need a subscription billing system.” Actually, I would say, “You need Zuora.”

Here’s why:

A subscription billing system, correction – a subscription billing system that is flexible, scalable and integrated, handles the tough stuff – change orders, proration, billing in advance and arrears, usage-based billing. The hard part of subscriptions is where the value is. Go for that if you want to make money!

You might not see it yet – actually you might not feel it yet, but it’s there. The pain you’ll experience when your customers want to upgrade, downgrade, pay with a briefcase full of cash (not a credit card), or pay you monthly not annually. Or your sales team wants to discount, and you want to empower them, but without fostering rampant pricing inconsistencies. Or your marketing team wants to offer all kinds of pricing and packaging scenarios to see what the market will respond to… without involving your IT department.

The way that subscription businesses grow is by understanding how the different segments of the market want to buy from you and then selling to them in those ways. It’s NOT about a lot of products but it IS about a lot of pricing and packaging options.

Totally not a surprise when I’ve hung up the phone or left a client meeting in which my client tells me that his customer said one of two things: “You’re charging how much??” or “Your price isn’t high enough for a company like ours.” Both of them have money, so sell to them in the ways they want to buy. This is what a powerful subscription billing system (read: Zuora) can do for you.

Traditional Household Services Move to Subscriptions

by Tricia Reilly

I was watching TV the other day and noticed a Terminix ad which touted a subscription offering called Ultimate Service Guarantee. For a nominal fee (which varies depending upon zip code, square footage, etc.), the subscription service includes a 24 hour SLA, 100% satisfaction, and a lifetime damage repair coverage, in the event of future damage caused by termites—for as long as you maintain your subscription.

When I was growing up, we got a call every so often from a local pest control company offering to come by and spray. My Mom swore that if you said no, they came by the following evening to drop off a load of ants, but that’s another story...

The service was somewhat haphazard with the vendor having to manually call you to schedule a service, rather than a recurring revenue model where you paid the same fee on a monthly or quarterly basis for on-going service.

As a condo-dweller myself, I don’t have need for a pest control service, but it got me thinking about the rise in subscriptions overall. When you think about it, household services are the perfect industry for subscriptions. Whether you’re talking about pest control, pool cleaning, gardening, carpet or upholstery cleaning, all of these services lend themselves to a subscription model.

It’s a win win for both consumers and vendors. For busy household CEO’s , it’s one less thing to have to schedule, plus it allows for easy budgeting; and for vendors, it provides a more predictable revenue stream.

Does your household subscribe to any cool services? Let us know; we’d love to hear about it.