IS 485 Clyde Barnett Adrienne Braganza Chris Capozzi Pamela Gustavson Brody Milne Will Ruiz
Zuora Inc. 2007 Zuora is Founded by Tien Tzuo (top), Cheng Zou (Middle), and K. V. Rao (Bottom) Long term vision: to enable any business, including small businesses such as lawyers and plumbers, to operate under a subscription-based business model.
The Founders Tien Tzuo Cheng Zou K. V. Rao
Case Study Highlights Zuora Inc. became the established leader of Saa. S What the heck is Saa. S? Saa. S – Software as a Service The replacement of traditional software with a web-based application that could be accessed through the internet Two Models Pertinent to Saa. S Technology Model - Multi-Tenancy Real-Time, consistent updates Decreased storage requirements Revenue Model - Pay-as-you-go Model Operating expense vs. capital investment
The Need for Saa. S Billing – An Example Internet • Starter | $29. 99 • Essential | $39. 99 • Premier | $53. 99 Lease a Modem $10. 00/m TV Phone • Starter | $23. 29 • Essential | $61. 29 • Advanced | $64. 99 Movie Packages $14 - $41 Sports Subscriptions $12 - $32 International Channels $11 - $24 Spanish Packages $33 - $68 • Starter | $12. 99 • Essential | $19. 99 • Premier | $34. 99 Three-Way Calling $1. 45/use Voice Mail $7. 99 Caller ID $9 Long Distance $2 - $4 Call Waiting ID $15
Cloud Computing – What? Phenomenon in which computing, networking, storage, and application services are provided as services with seemingly infinite capacity over the Internet
Zuora Inc. ’s Strategy Development • Offshored in Beijing, China • Fast, cheap, requires a lot of communication Sales • Generate product awareness • Get sales leads on website Management • Many decisions based on consensus • Important decisions made by core team
Problems Faced by Zuora Inc. Economic and Financial Crisis of 2008 • Funding/ cash flow a major issue • Can opportunity arise from crisis? Keeping the Lead in the Saa. S Billing Industry • Innovation key to staying ahead of competition • Aria, Opsource, Evapt, traditional billing systems Cloud Computing Slowly Eclipsing Saa. S • Must keep up with other leading cloud platforms • Amazon Web Services w/ Dev. Pay, Force. com w/ Checkout, Microsoft Azure, Google App Engine After such success, what next?
Possible Alternatives Zuora Inc. could Pursue on us c Fo ling ue il ntin a. S B Co Sa Expand Capture Broad Cloud Computing Trend Gr Ra ow B Br pidly ig a Ec oade to t nd G on r S ry r om ub an ow y sc d C rip a tio ptu re n
What should Zuora Inc. Do? What do you think? They should … Zuora Inc. could…
The Decision Capture Subscription Billing Opportunity Saa. S Billing Focus Embraced Cloud Computing Benefits “Mix of all Three” Decision
Did Zuora Inc’s Decision Pay Off? YES.
“Go big when you have a big idea” – Tien Tzuo Goal: • Triple staff • National offices in 15 countries • 10 New applications in 2 years • 2010: $20 million – Series C • 2011: $36 million – Series D Funding: • Total $82. 5 million Reality: • 400% growth annually • Awards
July 2008: Introduces ZBilling Received $15 mil in Series B Funding Oct 2008: ZPayments Nov 2008: ZForce
Jan 2009: Nov 2009: ZCommerce Nov 2011: Broad European Expansion, over 2 Bil Euro in contracted subscriptions Z-Payments 2. 0 Apr 2009: Z-Billing 2. 0 – built with Pay. Pal Nov 2010: Raises $20 mil in Series C funding Nov 2011: Raises $36 mil in Series D funding
The Future of the Subscription Economy Tien Tzuo, CEO “In the last 10 years, there's been a dramatic shift in the way both consumers and companies want to do business. Today, people would rather subscribe to services than to buy products. It's happening everywhere. And it will have a dramatic affect on your business. ”
Subscription Economy: The Key to Zuora’s Success Case Study: Evolution of the Music Industry 1. 2. 3. Traditional Brick and Mortar Business Model i. Tunes (Pay Per Use) Spotify + Pandora (Subscribe for all you can use) Key Motivator being Convenience (True for Businesses too!)
Zuora Inc. ’s Product Line -Billing -Finance -Payments -Force -Commerce
Why would a start-up company want to use Zuora Inc. ’s services over traditional ERP systems? What do you think? Because … Zuora Inc. provides…
Zuora’s Niche: Saa. S and Subscriptions Makes economical sense for start up companies and small businesses Allows for easy integration Multi-Tenant Platform: No need for upgrade schedule
Do you think ERP will adjust to the new needs of this economy or will it become obsolete? What do you think? It will… It won’t…
The Death of ERP Who are my customers? How can I price this service the way I want to? Where’s the renew button? Why can’t I sell to everyone? What is going on with my financials?
The Other Side of the Argument Perhaps traditional ERP, but not purpose-built ERP Room for improvement ERP can be customer centered
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