• April 30, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Zuora Scores 100

The subscription business model made necessary by software-as-a-service (SaaS) and other cloud-based enterprises continues to gain in popularity. In fact, according to research firm IDC, 76 percent of organizations will use at least one SaaS-delivered capability by the end of 2009 -- and Zuora is growing in step with the trend. The billing-and-payments service, founded in early 2008 by former executives of Salesforce.com and WebEx, has released Z-Billing 2.0, the latest version of its subscriptions-as-a-service platform.

Nearly one year after the launch of its first product, Zuora has added 100 new features to its service, expanding the ways users can add sophisticated billing practices to their organizations without those processes seeming complex.

Most notable is the addition of an entirely new module for handling tax calculations. Z-Billing 2.0's taxation module benefits from partnerships with tax-software companies Sabrix, Vertex, and Avalara, and supports multiple tax types including, but not limited to:

  • Sales and Use;
  • Value Added (VAT); and
  • Goods and Services (GST).

Taxes can be applied to any address, according to the company, and the solution provides the ability to report taxes to various jurisdictions.

Zuora groups the remaining 99 features evenly into three areas:

  • power: additional billing, pricing, and payment options that can be tailored to fit specific market segments;
  • automation: mass update tools, auto-sync capabilities, workflows, and integrations with other business functions; and
  • ease of use: the new user interface includes real-time invoice and payment history, usage, and rollover data.

"We're at our one-year anniversary, and subscriptions are everywhere - the cloud is everywhere," says K.V. Rao, one of Zuora's three cofounders. "We have 100 new features, 100 customers, and 100 great ways to grow business."

"We founded Zuora with the expectation that subscription-based businesses would explode in the coming years," said Tien Tzuo, CEO and cofounder of Zuora, in a statement. "We've seen subscriptions take off even faster than we expected. You can now subscribe to everything from socks to software to movies. With the new features and key partnerships, Z-Billing 2.0 sets the new standard for businesses developing a subscription service."

"With cloud computing, a telco-like subscription model with billing as a business-critical system is emerging as a key strategy," said Elisabeth Rainge, director of next-generation network (NGN) operations for IDC, in a statement. "Zuora's vision of delivering flexibility in business processes and billing rules is what subscription businesses need to grow and scale."

In addition to its 100 new features, Zuora announced it had reached the century landmark with customers as well. These cover a wide range of verticals, from blacksocks.com (where customers "subscribe" to periodic shipments of men's socks) to Better Place (which is developing a charging infrastructure for electric cars). One touted new customer, Sun Microsystems, was just acquired by database and middleware titan Oracle, so the future of that particular contract is uncertain.

"I've been convinced since I first met the founders of Zuora that the company had targeted a critical business requirement and significant market opportunity in the on-demand services industry," said Jeffrey Kaplan, managing director of SaaS consultancy ThinkStrategies, in a statement. "Zuora's rapidly growing customer base and ecosystem of partners is a clear indication of the timeliness and effectiveness of [its] billing solution, and success of its strategy and vision."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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