Welcome!

Cloud Expo Authors: Yeshim Deniz, Pat Romanski, Esmeralda Swartz, Carmen Gonzalez, Roger Strukhoff

Related Topics: Cloud Expo

Cloud Expo: Article

Billing Goes to the Cloud

...and that's why they started Zuora Inc on Marc Benioff and Benchmark Capital's combined nickel

Well, if the economy – and not just software, mind you – is going from products to services and perforce subscriptions then vendors are going to need an appropriate billing system that chases down and captures all the monthly payments, right?

Well, that’s what a couple of lads out of the on-demand school thought too and that’s why they started Zuora Inc on Marc Benioff and Benchmark Capital’s combined nickel.

Yes, that Marc Benioff, the CEO of salesforce.com, the software-as-a-service pioneer, who got his initial stake from his old boss Larry Ellison.

He kicked in on Zuora’s $6.5 million A round in December and Zuora is growing up in Oracle’s shadow. Literally. When you look out its windows in Redwood City, California all you see in the looming presence of Oracle.

Zuora, lest you think the word comes from some exotic language and is fraught with meaning, is simply the combination of the last names of its founders: CEO Tien Tzuo, who in his previous life was saleforce.com’s eleventh employee reporting directly to Benioff either as the company’s chief marketing officer or chief strategy officer and was there for its rise from zero to close a billion dollars in revenues; president KV Rao, an early WebEx recruit; and CTO Cheng Zuo, who architected and implemented WebEx’ order-to-cash system, which manages the SaaS operation’s subscription lifecycle process.

According to Zuora, which only came out from underground in March and put its Z-Billing system on the market in May, conventional billing systems like SAP, Oracle, Great Plains, QuickBooks and PayPal can’t cut it in a subscription economy. They were designed for manufacturing and distribution companies. They are built for one-time transactions.

Subscription-based billing is more complicated; the price plans alone are complex and varied. Getting the goose to lay the golden egg can be painful.

Z-Billing is supposed to be easy to use with a simple interface that can be easily customized to any B2B or B2C industry and any preferences. It also integrates with a company’s existing CRM and accounting packages.

The platform – nobody just has plain garden-variety software anymore – the platform is built as an on-demand model and can reportedly support any charge model including one-time, recurring, usage, metering and volume tier pricing.

It will scale, its creators say, into the millions of users and it will handle invoices, order changes and billing disputes. It also tracks metrics like churn, renewals, MRR (monthly recurring revenue), ACV (annual contracted value) and TCV (total contracted value) and is supposed to give the company a single source for data about customers, orders, bookings, revenues and renewal rates.

Zuora charges 2% of total billings for its billing services provided the monthly charges amount to at least 500 bucks and will drop to 1% for a large $100 million firm.

Two percent is less than the 2.7% of revenues the online services industry is supposed to be spending these days on billing. Zuora also claims that lack of flexibility in pricing and packing costs companies market share, holding up AT&T as an example.

So far Zuora has collected 12 customers, Tzuo said, including Coremetrics, the web-based analytics and precision marketing software house, with 27 different pricing models to keep straight

Salesforce.com, which has been fiddling with its own billing system, a development Tzuo is credited with, has yet to come over. “It’s a prospect,” Tzuo says.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (1) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Most Recent Comments
Phil 07/08/08 12:22:51 PM EDT

Good article, bad title...Billing is already SaaS with a few players well into the market. I guess the author didnt bother to google the title to see if it was true.

http://blogs.zdnet.com/SAAS/?p=484

ZDNet wrote about this months ago and profiled the existing vendors.

@CloudExpo Stories
SYS-CON Events announced today that Verizon has been named "Gold Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic network...
Blue Box has closed a $10 million Series B financing. The round was led by a strategic investor and included participation from prior investors including Voyager Capital and Founders Collective, as well as the Blue Box executive team. This round follows a $4.3 million Series A closed in December of 2012 and led by Voyager Capital. In May of this year, the company announced general availability of its private cloud as a service offering, Blue Box Cloud. Since that release, the company has dem...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
Cloudwick, the leading big data DevOps service and solution provider to the Fortune 1000, announced Big Loop, its multi-vendor operations platform. Cloudwick Big Loop creates greater collaboration between Fortune 1000 IT staff, developers and their database management systems as well as big data vendors. This allows customers to comprehensively manage and oversee their entire infrastructure, which leads to more successful production cluster operations, and scale-out. Cloudwick Big Loop supports ...
To manage complex web services with lots of calls to the cloud, many businesses have invested in Application Performance Management (APM) and Network Performance Management (NPM) tools. Together APM and NPM tools are essential aids in improving a business’s infrastructure required to support an effective web experience… but they are missing a critical component – Internet visibility. Internet connectivity has always played a role in customer access to web presence, but in the past few years use...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation...
What are the benefits of using an enterprise-grade orchestration platform? In their session at 15th Cloud Expo, Jeff Tegethoff, CEO of Appcore, and Kedar Poduri, Senior Director of Product Management at Citrix Systems, will take a closer look at the architectural design factors needed to support diverse workloads and how to run these workloads efficiently as a service provider. They will also discuss how to deploy private cloud environments in 15 minutes or less.
Headquartered in Santa Monica, California, Bitium was founded by Kriz and Erik Gustavson. The 1,500 cloud-based application using Bitium’s analytics, app management, and single sign-on services include bug trackers, customer service dashboards, Google Apps, and social networks. The firm states website administrators can do multiple tasks online without revealing passwords. Bitium’s advisors include Microsoft’s former CMO and the former senior vice president of strategy, the founder and CEO of Li...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace. ...
StackIQ offers a comprehensive software suite that automates the deployment, provisioning, and management of Big Infrastructure. With StackIQ’s software, you can spin up fully configured big data clusters, quickly and consistently — from bare-metal up to the applications layer — and manage them efficiently. Our software’s modular architecture allows customers to integrate nearly any application with the StackIQ software stack.
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, will address the big issues involving these technologies and, more important, the results they will achieve. How important are public, private, and hybrid cloud to the enterprise? How does one define Big Data? And how is the IoT tying all this together?
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
TechCrunch reported that "Berlin-based relayr, maker of the WunderBar, an Internet of Things (IoT) hardware dev kit which resembles a chunky chocolate bar, has closed a $2.3 million seed round, from unnamed U.S. and Switzerland-based investors. The startup had previously raised a €250,000 friend and family round, and had been on track to close a €500,000 seed earlier this year — but received a higher funding offer from a different set of investors, which is the $2.3M round it’s reporting."...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, da...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. ...
In his session at 15th Cloud Expo, Mark Hinkle, Senior Director, Open Source Solutions at Citrix Systems Inc., will provide overview of the open source software that can be used to deploy and manage a cloud computing environment. He will include information on storage, networking(e.g., OpenDaylight) and compute virtualization (Xen, KVM, LXC) and the orchestration(Apache CloudStack, OpenStack) of the three to build their own cloud services.