Click here to close now.




















Welcome!

@CloudExpo Authors: Liz McMillan, Automic Blog, Pat Romanski, Roger Strukhoff, Mike Kavis

Related Topics: @CloudExpo

@CloudExpo: 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
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Public Cloud IaaS started its life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adop...
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with ...
The Cloud industry has moved from being more than just being able to provide infrastructure and management services on the Cloud. Enter a new era of Cloud computing where monetization’s services through the Cloud are an essential piece of strategy to feed your organizations bottom-line, your revenue and Profitability. In their session at 16th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed how to easily o...
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, explained the best practices of continuous testing at high scale, which is rele...