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Secrets to Innovative
 Subscription Pricing
   and Packaging
Building the Next Great
                          Enterprise Software Company


Zuora Signs Over $1 Billion In
Subscription Revenue In Q1


       Built by Experts               Used by Leaders
Meet the Panel



        Kyle Christensen                 Guy Marion
Sr. Director Product Marketing   VP & GM CollabNet Cloud Services




http://www.zuora.com              http://codesion.com
   @kylechristensen                  @guy_marion
Innovators in Software
                            Development in the Cloud

                                                                                dPaaS
                                                             Dev Cloud

                                                     Agile


                                 Open ALM Platform


            Subversion
Founded
                                                                         Hybrid Cloud
    Development          Collaborative                                   Development
                                                       ALM
   Communities                                                             Platform
                             ALM

 1999         2000           2007         2008        2009      2011                2012


                                Trusted by Leaders
CollabNet Cloud Platform

Background
• Best of breed development tool
  hosting, integration, and management
• Replaces Codesion Cloud Platform
  (acquired in 2010) + 4,000 customers
• Integrates cloud and on-premise
• Business Grade platform

Business Model
• B2B SaaS/Cloud: Subscription Revenue
• Direct: Self-service + transactional
• Channels: Marketplace, product
  integrations, and Platform Partners
• SaaS acquisition/BI engine
                                         CloudForge – the development platform (dPaaS) for managing
                                                hosted, integrated, and deployed applications
Commerce Has Evolved.


     BUY NOW



     2001                                                            2011

By 2015, 35% of Global 2000 companies will generate
revenue through subscription-based services and
revenue models.

            April 2011: Building a Strategy for the Subscription Economy
The World is Shifting From Products to Services




  Technology   Transportation?   Retail?     Music?




                                               A

   Video?          Voice?        Legal?    Healthcare?




We call this the Subscription Economy™
The Subscription Economy Imposes a Completely
Different Set of Operating Rules on Business Systems

Product Economy                     Subscription Economy


      Sell Units           Monetizing Customer Relationships



      Price Per Unit       Pay-as-you-Go Pricing Plans


      One-Time Orders      Multiple Orders Over a Lifetime


      Forced to Pick a
      Customer Segment     Sell to Consumers & Businesses


      Silos of Financial   Time-Based, Interrelated Bookings,
      Data                 Billings, & Revenue
The Subscription Economy Demands a New Platform

        BUY NOW




                  http://www.readwriteweb.com/cloud/2010/06/zuora-announces-z-commerce-for.php
The World’s First Application Suite
         Built for the Subscription Economy

 Subscription           Subscription           Subscription
Commerce               Billing                Finance




      We found Zuora and the light bulb went off: a
     business operations platform designed especially
     for subscription businesses like ours.
How Are Companies Pricing in
 the Subscription Economy?
Strategy #1: Freemium Upsell Strategy

  Start with free and upsell to paid.
Strategy #2: Multiple Edition Strategy



 Multiple
editions for
 different
audiences.
Strategy #3: Promotional Strategies

 Start with a
  free trial.




 2-months
  free with
   annual
prepayment.
Strategy #4: Pay-as-you-Go Strategy




                                       Pricing based
                                      on consumption
                                           units.
Strategy #5: Overage Strategy




Overage pricing
applied beyond
allocated usage.
Strategy #6: Bundling Strategy




                                   Create
                                   flexible
                                 pricing &
                                 packaging
                                  bundles.
Strategy #7: Segmentation Strategy

         A   US Pricing                        B   Asia Pricing




                 Have unique pricing for different markets
                   and/or different types of customers.
CollabNet’s Cloud Journey
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)




                          2008: Enterprise-grade SCM
                            & Deployment Services
                                (“Multiple Edition”)
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)




                                                        2008: Enterprise-grade SCM
                                                          & Deployment Services
                                                              (“Multiple Edition”)


                     2010: SaaS business
                   expansion & automation
                   (B2B SaaS – Velocity Sales)
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)




                                                        2008: Enterprise-grade SCM
                                                          & Deployment Services
                                                               (“Multiple Edition”)


                     2010: SaaS business
                   expansion & automation
                   (B2B SaaS – Velocity Sales)




                                                           2012: CloudForge-
                                                        development Platform as a
                                                             Service (dPaaS)
                                                         (+ Product-Driven Conversion)
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)




                                                                           2008: Enterprise-grade SCM
                                                                             & Deployment Services
                                                                                  (“Multiple Edition”)


                                        2010: SaaS business
                                      expansion & automation
                                      (B2B SaaS – Velocity Sales)




                                                                              2012: CloudForge-
                                                                           development Platform as a
                                                                                Service (dPaaS)
                                                                            (+ Product-Driven Conversion)


      Next: Hybrid Cloud Ecosystem
          (Hybrid Subscription + Utility)
CollabNet Cloud Journey
 2004: CVSDude-
CVS & Subversion
     Hosting
   (“Freemium”)




                                                                      2008: Enterprise-grade SCM
                                                                        & Deployment Services
                                                                             (“Multiple Edition”)


                                        2010: SaaS business
                                               2000% Revenue
                                      expansion & automation
                                      (B2B SaaS – Velocity Sales)
                                                        Increase



                                                                         2012: CloudForge-
                                                                      development Platform as a
                                                                           Service (dPaaS)
                                                                       (+ Product-Driven Conversion)


      Next: Hybrid Cloud Ecosystem
          (Hybrid Subscription + Utility)
What Else Can We Tell You?
Sign Up for a Free Trial at http://codesion.com
Sign Up for a Free Trial at www.zuora.com
Thank You!
<end>

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Secrets to Innovative Pricing and Packaging

  • 1. Secrets to Innovative Subscription Pricing and Packaging
  • 2. Building the Next Great Enterprise Software Company Zuora Signs Over $1 Billion In Subscription Revenue In Q1 Built by Experts Used by Leaders
  • 3. Meet the Panel Kyle Christensen Guy Marion Sr. Director Product Marketing VP & GM CollabNet Cloud Services http://www.zuora.com http://codesion.com @kylechristensen @guy_marion
  • 4. Innovators in Software Development in the Cloud dPaaS Dev Cloud Agile Open ALM Platform Subversion Founded Hybrid Cloud Development Collaborative Development ALM Communities Platform ALM 1999 2000 2007 2008 2009 2011 2012 Trusted by Leaders
  • 5. CollabNet Cloud Platform Background • Best of breed development tool hosting, integration, and management • Replaces Codesion Cloud Platform (acquired in 2010) + 4,000 customers • Integrates cloud and on-premise • Business Grade platform Business Model • B2B SaaS/Cloud: Subscription Revenue • Direct: Self-service + transactional • Channels: Marketplace, product integrations, and Platform Partners • SaaS acquisition/BI engine CloudForge – the development platform (dPaaS) for managing hosted, integrated, and deployed applications
  • 6. Commerce Has Evolved. BUY NOW 2001 2011 By 2015, 35% of Global 2000 companies will generate revenue through subscription-based services and revenue models. April 2011: Building a Strategy for the Subscription Economy
  • 7. The World is Shifting From Products to Services Technology Transportation? Retail? Music? A Video? Voice? Legal? Healthcare? We call this the Subscription Economy™
  • 8. The Subscription Economy Imposes a Completely Different Set of Operating Rules on Business Systems Product Economy Subscription Economy Sell Units Monetizing Customer Relationships Price Per Unit Pay-as-you-Go Pricing Plans One-Time Orders Multiple Orders Over a Lifetime Forced to Pick a Customer Segment Sell to Consumers & Businesses Silos of Financial Time-Based, Interrelated Bookings, Data Billings, & Revenue
  • 9. The Subscription Economy Demands a New Platform BUY NOW http://www.readwriteweb.com/cloud/2010/06/zuora-announces-z-commerce-for.php
  • 10. The World’s First Application Suite Built for the Subscription Economy Subscription Subscription Subscription Commerce Billing Finance We found Zuora and the light bulb went off: a business operations platform designed especially for subscription businesses like ours.
  • 11. How Are Companies Pricing in the Subscription Economy?
  • 12. Strategy #1: Freemium Upsell Strategy Start with free and upsell to paid.
  • 13. Strategy #2: Multiple Edition Strategy Multiple editions for different audiences.
  • 14. Strategy #3: Promotional Strategies Start with a free trial. 2-months free with annual prepayment.
  • 15. Strategy #4: Pay-as-you-Go Strategy Pricing based on consumption units.
  • 16. Strategy #5: Overage Strategy Overage pricing applied beyond allocated usage.
  • 17. Strategy #6: Bundling Strategy Create flexible pricing & packaging bundles.
  • 18. Strategy #7: Segmentation Strategy A US Pricing B Asia Pricing Have unique pricing for different markets and/or different types of customers.
  • 20. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”)
  • 21. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”) 2008: Enterprise-grade SCM & Deployment Services (“Multiple Edition”)
  • 22. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”) 2008: Enterprise-grade SCM & Deployment Services (“Multiple Edition”) 2010: SaaS business expansion & automation (B2B SaaS – Velocity Sales)
  • 23. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”) 2008: Enterprise-grade SCM & Deployment Services (“Multiple Edition”) 2010: SaaS business expansion & automation (B2B SaaS – Velocity Sales) 2012: CloudForge- development Platform as a Service (dPaaS) (+ Product-Driven Conversion)
  • 24. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”) 2008: Enterprise-grade SCM & Deployment Services (“Multiple Edition”) 2010: SaaS business expansion & automation (B2B SaaS – Velocity Sales) 2012: CloudForge- development Platform as a Service (dPaaS) (+ Product-Driven Conversion) Next: Hybrid Cloud Ecosystem (Hybrid Subscription + Utility)
  • 25. CollabNet Cloud Journey 2004: CVSDude- CVS & Subversion Hosting (“Freemium”) 2008: Enterprise-grade SCM & Deployment Services (“Multiple Edition”) 2010: SaaS business 2000% Revenue expansion & automation (B2B SaaS – Velocity Sales) Increase 2012: CloudForge- development Platform as a Service (dPaaS) (+ Product-Driven Conversion) Next: Hybrid Cloud Ecosystem (Hybrid Subscription + Utility)
  • 26. What Else Can We Tell You?
  • 27. Sign Up for a Free Trial at http://codesion.com
  • 28. Sign Up for a Free Trial at www.zuora.com
  • 30. <end>

Hinweis der Redaktion

  1. Thanks. Partnership.Your successBuilt for you---------I want to personally thank you for being here. I am very excited to have the opportunity to present our product vision.The turnout shows that you look at it the same way we do – as a true partnership.We love our customers. It’s our number one strategic objective and we live it and breath it everyday.We believe that our success is driven only by your success. We are in it for you to win it.Everything you’ll see here today is built around enabling your success.
  2. We made a bold prediciton 4 years ago, that we were moving to a subscription economyBut you, in this room, are the leaders that made that happenYou are paving the wayYou are the ones telling us how this future is being shapedIt is because of you, that Gartner now predicts
  3. There is going to be a mass migration away from Oracle and SAP
  4. Slide titleWe are making commerce easy and available anywhereWe are extending our lead in billing.We are embarking on the final frontier, embracing finance and delivering unprecedented accounting and revenue functionalityAs Tien said, we believe ERP is going to be irrelevant in 5-10 years.But let’s be clear. We’re not arrogant enough to suggest that Zuora is going to make ERP irrelevant.The market is making ERP irrelevant. You are making ERP irrelevant.And Zuora has already emerged as THE enterprise business application powering the subscription economy.Thanks to all my senior product guys for their incredible work.Thanks to everyone in the audience for their help in building this vision, and for being pioneers in the subscription economy.Thanks for partnering with Zuora as we realize our vision.All of my product guys will be available after the session to answer questions and take feedback. I encourage you to track them down.Thanks again. And I’ll turn the stage over to Jeff to talk about what’s next at Zuora day.