Zuora Launches App Suite for Subscription Businesses
The offering includes a new finance module to go along with Zuora's billing and commerce cloud software
Mon, September 17, 2012
IDG News Service (Boston Bureau) — Zuora, a cloud application startup focused on products that serve subscription-based businesses, announced Monday that it has added a finance module to its previously released billing and commerce software and is selling the trio as a suite called Z-Business.
There are millions of businesses based on a subscription model, and they go well beyond magazines, wine-of-the-month clubs and digital content, said Zuora CEO Tien Tzuo. He pointed to companies such as Rent the Runway, which allows customers to rent high-end fashions on a subscription basis, as well as Kiwi Crate, which provides regular deliveries of arts and crafts products for kids.
The core point is that these companies are building deeper, ongoing relationships with customers, versus dealing with them transaction by transaction, Tzuo said.
Zuora's billing and commerce software has helped such companies handle two aspects of their businesses, but it turns out that finance presents challenges to subscription businesses as well, according to Tzuo. "Finance hasn't changed since double-entry bookkeeping was invented," he said. "That's worked well for 500 years. It doesn't work anymore."
For one thing, recurring revenue and expenses have to be recorded and tracked differently than one-time sales and costs, according to the company's announcement.
Subscription companies are dealing with these problems, but in a painful and time-consuming manner, according to Tzuo. "What we're finding is more and more of the finance department is seeping out into a phantom accounting system called Microsoft Excel," he said.
Z-Business and the finance module will help these companies crunch their subscription numbers and get them into the general ledger more easily, according to Zuora.
About 20 Zuora customers have been using the new finance component, including a large telco in Singapore, Tzuo said.
Z-Business pricing starts at $30,000 a year for the Growth edition, aimed at smaller companies, and $100,000 for the enterprise version. Existing billing and commerce customers can upgrade when they like to Z-Business, and Zuora will make "a sweet deal for them," Tzuo said.
Zuora made the announcement as it holds its Subscribed 2012 user conference in San Francisco.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com