Subscribed UK: CEO's Keynote

1. WELCOME TO LONDON October 2012 1

2. 2 “Zuora Receives £36m For European Expansion ” November 17th, 2011

3. It all started with a simple idea That there is a shift from products to services 3

4. “ The global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in ” 2020. Forrester 4

5. “ Carsharing subscriber base to be 14 Million in EU by 2020; 32 ” Million worldwide Frost & Sullivan 5

6. “ By 2015, more than 40 percent of media and digital-products companies around the world will use subscription services for their fulfillment, billing, ” and renewals Gartner 6

7. BUY NOW Subscribe The Past! The Future We Call this Shi, the Subscrip2on Economy™ 7

8. Why the Subscrip2on Economy ? Technology Trends Demand Business Model Smart Money Cloud Consumers want to It’s a better business Mobile subscribe to services model for growth Social Businesses want to subscribe to services Wall St. and Sand Hill Value Subscription-Based Companies Subscribe 8

9. The Subscrip2on Economy is a Green Economy “ The average car is idle ” 92% of the time 9

10. The Subscrip2on Economy is about Customer Rela2onships Product Focused Rela2onship Focused BUY NOW Subscribe 10

11. The Subscrip2on Economy Requires a Completely Diﬀerent Approach to Building Businesses Product Economy Subscription Economy Sell Units Mone2zing Customer Rela2onships Pay-‐as-‐you-‐Go Pricing Plans Price Per Unit The image cannot be One-‐Time Orders Mul2ple Orders Over a Life2me Forced to Pick a B2Any: Sell to Consumers & Customer Segment Businesses Complex, Interrelated Bookings, Simple Financial Metrics Billings, & Revenue 11

12. The Media Industry is Moving to the Subscription Economy 12

13. The Tech Industry is Moving to the Subscription Economy 13

14. The Telecom Industry is Moving to the Subscription Economy 14

15. The Retail Industry is Moving to the Subscription Economy 15

16. Craft Coffee SweetBox Steepster The Fruit Guys Kiwi Crate FabKids Coffee Chocolate Fine Teas Fruits & Veggies Crafts & Books Clothing BirchBox GuyHaus Focus N Fly Test Tube Wonder Sitter Spotify Beauty Guy Supplies Fitness Beauty Samples Baby Sitting Music Hoseanna Put This On Bag Borrow or Rent the Runway Babbaco Mystery Tackle Box Steal Hosiery Men’s Handbags Women’s Kids Toys/ Fishing Accessories Dresses Activities Equipment Sweet Petula McSweeneys Meundies Dollar Rubber Club Bespoke Post Spice Guides Soaps Shirts Underwear Condoms Luxury Items Date Idea Guide 16

17. Making the Web’s Subscription Economy Hum “ As Web businesses embrace subscription business models, the benefits are clear: reduced customer acquisition costs and ” steady cash flow June 12, 2012 17

18. “ The new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to what might be called a Rentership Society, far from being a drag, will unleash a May 4, 2012 wave of economic efficiency that ” could fuel the next boom. 18

19. Mar 4, 2012 “ Consumerism is being redefined for the mobile age, and the model is spreading among professionals and families in ways that were little anticipated, even by the venture capitalists funding this 19 new era of cooperative capitalism ”

20. “ C.E.O.’s are beginning to appreciate the value of recurring revenue in a way never before … the software industry adopted it, which caught people’s attention. Now you’re seeing companies in just about every ” kind of industry embracing it Mar 7, 2012 20

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23. Customer Satisfaction Graph – pie chart of 95% customer satisfaction 23

24. 24

25. Exponential Growth In Transaction Volume 25

26. Strong Adoption in Large Enterprises Educa2on Travel Services Cloud Services Media Telecom 26

27. 27 “ Q1'08 ARR Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 subscription systems. Q4'09 Q1'10 ” Q2'10 Q3'10 Q4'10 In short order, Zuora has become Q1'11 the dominant player in cloud-based Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 The Fastest Growing SaaS Company Q2'13

28. $12 25% Billion Europe Total Invoice Volume Total Invoice Volume 28

29. YOU Are The Subscription Economy 29

30. One Year Later We are at the Tipping Point 30

31. In 2008, We Launched Z-Billing In 2010, We Launched Z-Commerce 31

32. Last month, we introduced our third major product 32

33. 1494 A.D. Luca Bartolomeo Pacioli invents the system of Double Entry Bookkeeping 33

34. For over 500 years, the system has worked… Double entry accoun=ng To the CFOs of becomes the cornerstone of modern accoun=ng the modern era 34

35. Until Now 35

36. The Problem: You Need to Differentiate Between One-Time and Recurring Amounts A $100 is a $100 is a $100. The rules say it all goes in the same account. 36

37. The Problem: You Want To Spread Revenue Over Time The rules don’t allow me to spread these amounts over time. Now you’re just being a rebel. 37

38. The Problem: Your system doesn’t know what to do when subscriptions change I don’t have a rule for that. You’ve got yourself into quite a mess… 38

39. The Result: Revenue managers are drowning in spreadsheets •  Revenue Recogni2on •  Subscrip2on Metrics (MRR, ARR, CLTV) •  Changes, Adjustments, Credits •  Complex Recurring Billing 39

40. The Result: It takes Weeks for finance teams to close the books “We need more 2me” - Finance Team 40

41. The Result: CFOs are maintaining 2 sets of books “PwC will love these.” Debit Credit AR 600M Revenue 600M Appease the auditors here. Actually run the business here. 41

42. The Result: CMOs are prevented from implementing new innovations 42

43. The Result: CEOs have a hard time explaining their success to Wall Street Page 11 43

44. The Result: And Wall Street fails to value Subscription Businesses correctly “ CRM shares look heavily overvalued because rising revenue growth has actually translated to falling net income. “ Maybe CEO Marc Benioff will one day be able to translate all of this low-margin selling into huge profits, but for now it kind of looks more like the Napster model than the iTunes model, and that concerns us. 44

45. The world of Finance is broken… 45

46. Introducing Z-Finance The World’s ﬁrst ﬁnance application built for the Subscription Economy 46

47. Z-Finance is built on a new foundation Mul2 dimensional Ledgers Spread revenue over 2me Diﬀeren2ate between one 2me and Intelligent Algorithms recurring revenue Revolu2onary Data Model Calculates key subscrip2on metrics Powerful Rules Engine Adapts to subscrip2on changes 47

48. Deﬁne rules to manage complex ✔ revenue recogni2on policies Tag charges with revenue revenue ✔ and deferred revenue GL accounts Tag charges with with revenue ✔ recogni2on rules Control revenue recogni2on trigger ✔ dates View earned and deferred revenue ✔ reports Accounting Close Tools tools to accelerate your month end close 48

49. Deﬁne rules to manage complex ✔ revenue recogni2on policies Tag charges with revenue ✔ revenue and deferred revenue GL accounts Tag charges with with revenue ✔ recogni2on rules ✔ Control revenue recogni2on trigger dates View earned and deferred ✔ revenue reports Revenue Recognition Tools that handle complex revenue rules 49

50. Create or import your chart ✔ of accounts ✔ Tag charges with GL account codes Tag transac2ons such as ✔ payments, credits, refunds, adjustments etc with GL account codes Chart of Accounts to track charges through the revenue lifecycle 50

51. ✔ Generate debit and credit journal entries to simplify your general ledger updates ✔ Align journal entries with GL accounts Easy Accounting Integration to unburden your IT team 51

52. ✔ Create custom user roles Reuse the audit peace of mind Associate roles with granular user screen shot from ✔ permissions the website Control visibility and user ac2ons on ✔ sensi2ve ﬁnancial data Tight Security Controls for audit peace of mind 52

53. Tames your revenue recognition processes Upgrades, downgrades, cancella2ons, refunds etc. are all taken care of! “ We use SAP. We run our broadband business on Zuora … we get all our journal entries from Zuora … without time consuming and expensive ” customization Vignessa Moorthy, CEO of ViewQwest 53

54. Unburdens your finance team, enabling your growth Unleash your growth strategies without burdening ﬁnance “ …Z-Finance makes it easier for us to scale as our business grows ” Vince Zumbo, CFO of Autotask 54

55. Gives you audit peace of mind Rapidly review details of any transac2on from closed accoun2ng periods “ …they have nailed it with Z-Finance, providing the next level of audit ” friendly automation … Bruce McFadyen, CFO of Firehost 55

56. •  300 accounting periods created •  Over 5 million financial transactions analyzed •  207 accounting periods closed Get up close and personal with Z-Finance Join Z-Finance PMs at 3pm in the Colonnade 56

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59. 59

60. Subscribe 60

61. Chasm The Future The Present 61

62. Why Can’t I Make My Processes Why is it so hard Why Can’t I Find FLOW to GROW my What I Need to business KNOW 62

63. Product Relationships 63

64. Goal: Goal: Ship More Units Build Valuable Relationships 64

65. The Strategies Required to Grow a Subscription Business are Very Different 65

66. Product Business Design Make Sell Product Product Product 66

67. Subscription Business Increase the Value of Your Customers Acquire New Customers Reduce Churn 67

68. Packaging & Pricing Acquire New Increase Value Per Reduce Churn Strategy Customers Customer Launch First Product X Add-‐on Op2ons X Monthly vs Annual X X X Op2ons Higher Edi2ons X X Lower Edi2ons X X Product Bundles X Pricing Tiers X X Usage & Overage X X X Mul2ple Currencies X X Renewals X Pricing Changes X X Regional Pricing X 68

69. Your Existing Systems Can’t Support the Pricing & Packaging You Need to Grow 69

70. The Processes Required to Make a Subscription Business Flow are Very Different 70

71. Product Business Quote-To-Cash 71

72. Subscription Business Quote-To-Cash Renewals Payment Failures Account Suspension Amendments Account Management 72

73. Product Business Commerce Billing Finance Book Order Invoice & Recognize & Ship It Collect For It It 73

74. Subscription Business 74

78. 78

79. Subscription Business Billing Commerce Finance 79

80. Your Existing Systems Can’t Support the Processes Needed To Make Your Business Flow 80

81. What you Need to Know with a Subscription Business Model is Very Different 81

82. Traditional Income Statement 82

83. Revenue ARR $100 $0 83

84. Subscription Economy Income Statement ARR $100 Churn (10) Retention Rate Net ARR 90 COGS (20) G&A (10) R&D (20) Recurring Profit 40 Recurring Profit Margin Growth (40) Growth Net New ARR 40 Efficiency Index Ending ARR $130 84

85. The Three Key Metrics of the Subscription Economy Retention Recurring Growth Rate Profit Margin Efficiency How much of ARR less Churn How much does your ARR you less Non-‐Growth it cost you to keep every year. Spend acquire $1 of ACV “ The metrics for Cloud computing is fairly different ” from traditional enterprise software. Bessemer Venture Partners – Top 10 Laws for Cloud Compu=ng 85

86. Your Existing Systems Don’t Have the Metrics You Need to Know 86

87. I Need a System That Helps me Grow , Flow and Know in the Subscription Economy 87

88. Your Systems Today CRM ERP GL 88

89. Products Relationships 89

90. Goal: Build Goal: Ship Valuable More Units Relationships 90

91. Enterprise Relationship Resource Business Planning Management 91

92. We’re Here Today to Announce Z-Business, The World’s First Relationship Business Management System 92

93. Z-‐Business Is Built On a Founda2on For the Subscrip2on Economy 93

94. Z-‐Business Solves Your Rela2onship Commerce Needs 94

95. Z-‐Business Automates Your Billing and Payment Processes 95

96. Z-‐Business Revolu2onizes your Finance Opera2ons 96

97. Z-‐Business Plugs Into Your CRM and GL 97

98. Z-‐Business Helps You Grow, Flow and Know Our Mission: Help you succeed in the Subscrip2on Economy GROW: FLOW: KNOW: Build and grow your Run and ﬂow your Have the right metrics subscrip2on business subscrip2on business to op2mize your and revenue. processes eﬃciently. subscrip2on business. 98

99. thank you. 99

Subscribed UK: CEO's Keynote

Subscribed UK: CEO's Keynote

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Subscribed UK: CEO's Keynote