Zuora's CEO's Keynote for Subscribed in London. Subscribed is Zuora's first annual global conference series for the Subscription Economy, landing down in San Francisco, London and Sydney in the Fall of 2012. Learn more about future dates and keynote replays at Subscribed.com.
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
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
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
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
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
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
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
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