The Silicon Review
“A new era with a new imperative for all companies—turning customers into subscribers.”
Founded in 2007 by former Salesforce.com and WebEx executives, Zuora is an enterprise software company that designs and sells SaaS (Software as a Service) applications with multiple modules for companies that help other firms move towards a subscription-based revenue business model, including tools for billing, accounting, finance and analytics.
Headquartered in San Mateo, California, Zuora has offices in 15 cities across 4 continents and employs close to 600 people.
The Subscription EconomyTM
There has been an explosion of new types of business models all designed to keep customers consistently engaged in long-term relationships. The Subscription Economy is a phrase, coined by Zuora’s Founder and CEO Tien Tzuo, to describe this new era of business models where companies of all sizes offer broad libraries of services via subscriptions, which would challenge the 20th century manufacturing economy by shifting the focus to delivering services instead of products. Subscription Economy companies live and die by their ability to focus on the customer. The formula for growth lies in delivering multi-channel experiences and services (that get better over time).
The company developed a prototype, focusing on simplifying the complications of subscription-based systems such as time, recurrent billing, upgrades, downgrades and different pricing bundles. The product was soon expanded once it was realized that customers required software with much broader scope and scale. The needed real-time updates with API’s, payment systems, commerce platforms, capable of handling multiple currencies and tax compliance with an app marketplace for integrations. The shift to the Subscription Economy was being driven by subscribers for both b2b companies and b2c companies. They wanted outcomes and experiences. They were moving away from owning things and more towards accessing the things they need when they need them. For example why own a car when Uber is only a click away? Whygo to Walmart when you can get anything you need from Amazon? As a result, Zuora recognized that not just a new business model was emerging, but an entire way of doing business. And what is important in this new world is the relationship you have with your subscribers. That’s why they developed an end-to-end subscription business management platform with the capabilities and insights businesses need to grow a healthy subscription business and create lifelong customers.
Zuora Product Lines
Zuora is not a generic financial suite based on lowest common denominator business needs, instead providing a relentlessly focused solution that helps businesses rapidly transition to subscriber-centric, digitally-enabled business models.
Having studied the shift to recurring revenue-based business models for almost ten years, the company excels at taking care of the subscription business management, so the customers can focus their efforts with on creating great outcomes and experiences for their subscribers.
Zuora, Inc. is the world’s leading provider of subscription billing, commerce, and finance solutions, which is a set of applications designed for managing successful subscription businesses. Zuora’s core platform keeps track of subscription payments, invoices, pricing, product catalogs, and taxation. They also offer customers reporting and analytics that gives them access to their customers demographic, behavioral and financial performance helping them constantly improve business results and their relationship with their subscribers. Zuora is also compatible with a number of mission critical business applications. They also have a thriving app development marketplace for customers that require third party integrations.
Zuora’s Commerce Product Line is a set of applications designed for businesses hoping to sell products in a subscription business. One of Zuora’s most popular Commerce Line products is a “business-to-business” native Force.com application called Z-Force that allows sales reps to create subscription orders in Salesforce.com and it also allows Salesforce users to view subscription-related data in SalesForce.
It also has a Subscription Finance Product Line, a set of applications designed to manage the complexity of accounting and revenue recognition operations for subscription businesses. It allows businesses to summarize their subscription transactions and create journal entries for their accounting close processes in any general ledger system.
The Zuora Success Mantra
Zuora employees follow a ‘ZEO culture’, where every member is a ‘ZEO’ – the CEO of their Zuora career. The entire staff is unified behind a single vision and mission. Their vision is that one day every company in the world will join the Subscription Economy. Their mission is focused on helping companies be successful in the Subscription Economy, and the company believes in empowering its employees to own their future and drive change and innovation across the entire firm.
Zuora has developed a methodology called the 9 Keys, which is a proven methodology for launching a successful subscription business. This methodology also helps employees stay customer-focused. Having been market leaders in their field for several years, on the basis of thousands of conversations with customers, the company has based these nine principles: Price, Acquire, Bill, Collect, Nurture, Account, Measure, Iterate and Scale. The pioneering company also encourages its employees to step out of their roles and truly see things from the customer’s perspective: their goals, their aspirations, and their challenges.
Looking forward to the future
The company believes that all of the Fortune 500 companies will be running subscription business models in one way, shape or form, and are confident of powering that transformation in a market forecasted to exceed $100B by 2020. Over the years Zuora has refined its core subscription management platform to improve a business’ ability to understand their customer and build healthy mutually beneficial relationships with their subscribers. In 2015, the company acquired a data analytics company to accelerate the development of their predictive capabilities. This capability is what is behind their ability to wrap their entire business around the subscriber, combining financial, behavioral and demographic data into a single platform with a unified time-based view of the customer.
“Zuora is helping us to achieve our ultimate goal: to improve the environments where people live and work, while dramatically reducing the consumption of resources.” -Cyril Perducat, EVP Digital Services &IoT, Schneider Electric.
Meet the Founder
Tien Tzuo, CEO and Co-Founder: Tzuo completed his Bachelor’s degree in Electrical Engineering from Cornell University and also holds a Master’s Degree in Business Administration from the Stanford Graduate School of Business. He co-founded Zuora in 2007 with K.V. Rao and Cheng Zou, the name of the company being a combination of their three surnames.
Before Zuora, Tzuo was one of the ‘original forces’ at salesforce.com, where he spent 9 years. He was the 11th hire before the company had a product or any customers. He ultimately became the company’s first Chief Marketing Officer and later held the position of Chief Strategy officer. More recently, as Zuora’s CEO, Tzuo has built one of the world’s fastest growing SaaS companies, while also evangelizing the shift to subscription based business models and the complex billing structures they inherit, coining the phrase ‘Subscription Economy’.
Tzuo was named Entrepreneur of the year in 2016 by E&Y, he was CMO of the Year Finalist by the CMO Council and BusinessWeek Magazine while at salesforce.com and is on Destination CRM’s Who’s Who in CRM list. He is also on the Board of Directors for Network for Good and Sailthru.