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Zuora update lets customers mix and match revenue models

TechCrunch TechCrunch 12/04/2016 Ron Miller

Zuora has always been a bit ahead of the curve when it comes to the subscription economy. Company founder Tien Tzuo recognized something in 2008 when he left a comfortable job at Salesforce to launch a new company. The world was about to change dramatically with a huge influx of cloud services, and it needed a platform for tracking the new way companies recognized revenue.

Until the advent of subscription-based businesses, companies worked in the same way. They created a widget, sold it, recognized the revenue and repeated the exercise. In the brave new world of subscriptions that Tzuo saw coming in large part because of his experience at Salesforce, the sale was just the beginning. You signed up for a certain length of service and the company recognized that payment over the subscription time period, rather than all at once as with the widget. It was and remains a revolutionary notion for recognizing revenue.

The earliest adopters of Zuora were cloud companies like Box, Okta and DocuSign. As we move forward, more traditional companies trying to transform are experimenting with new business models along side the older ones and need tools for dealing with that.

Recognizing that, the company announced the latest release of its platform dubbed Zuora 17, which allows companies to record multiple kinds of revenue on a single platform. Car companies are an excellent example. While these traditional manufacturers aren’t closing down the dealer model, they are flirting with new ways of doing business.

Earlier this year, Ford announced a new service that lets 3-6 people lease a vehicle together. Meanwhile GM launched a new car-sharing service called Maven, which uses a ZipCar-style membership model where you grab a car when you need one. Both announcements show that these car companies are trying different revenue models and Zuroa wants to help them on that journey.

“These companies are reinventing products based on customer relationships. They are all becoming software companies,” Tzuo explained. Zuora comes into play because these companies don’t have systems to deal with these new types of revenue. They were built for the ‘sell a widget, ship a widget, get paid’ kind of model.

The update not only deals with multiple revenue models, it has links into traditional accounting and fulfillment systems. Companies using a system like SAP or Oracle can use Zuora along side those legacy systems, and the two can communicate and share data (assuming it works as described).

Zuora has raised over $242 million. While it has talked about going public, like many companies looking to IPO, it has decided it’s better to wait for the markets to get friendlier to tech IPOs. The company raised $115 million a year ago, and Tzuo says he’s content to sit tight for now and wait for the markets to adjust.

“We don’t need money. We will continue to focus outside of the public spotlight. There is no reason to be the first one out,” he said.

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