It would be forgivable to miss stories about relatively unknown vendors adding partners to their service offering. Newcomer to the billing world, Zuora, has just such a story.
New business models are emerging from the cloud and new players are emerging with them. Zuora, led by Tien Tzuo, entrepreneur and a key driver in the success of salesforce.com (he was employee number 11), is a company that has embraced new models.
The cloud finally does away with the need for significant investment in licences, and if service providers can buy software as a service it increases the flexibility that they can then build into their own pricing models.
Connected Planet has seen Zuora before, but in the background of a story about Open Range’s plans for cloud service roll out. (CP: Open Range moves to LTE using cloud-based billing and CRM)
Zuora’s central offering reflects an old theory about how companies should be able to buy software and because of the cloud, finally makes it possible.
Indeed the ‘subscription economy’ is a term coined by Tien Tzuo as the business model of the future, not just the business model for telecom. With customers from a wide cross section of media and communications companies, this looks like a valid argument.
With the subscription economy comes issues not normally thought through by ‘traditional’ billing vendors – issues such as chargeback. Historically a major barrier to subscription models, chargeback – the reversal of a transaction between merchant and customer – is an expensive process to implement. Solutions to manage and even prevent the need for chargeback will be welcomed by the industry and will significantly lower the cost of doing business in the micro-transaction area.
As the Q&A with Open Range points out, there are risks inherent in dealing with smaller companies (market knowledge, financial strength) but the upside is innovation and flexibility.
This new wave is bringing a new wave of companies and models. This calls for both commentators and service providers to evaluate many new names as they plan the roll out of the next generation of services.
Zuora I am proud too see your success, keep up the good work and tell Suzy Seebold hello…..