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