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The 6 Reasons
Subscription
Companies are
Taking Over the
World Why Zuora
Zuora Provides a BluePrint to Succeed in the Subscription
Economy!

B y Tr a v i s H u c h Z U O R A

Slide 1 − Zuora Confidential, not for distribution beyond
intended recipient
Let’s Make this Interactive

Poll: Who owns pricing of your
products/services? (Group or Role)
Q&A
@zuora
@travishuch

Slide 2 − Zuora Confidential, not for distribution beyond
intended recipient
The Market Momentum
of SaaS is Undeniable

Slide 3 − Zuora Confidential, not for distribution beyond
intended recipient
You can have
Subscription without SaaS,
But you can’t have
SaaS without Subscription

Slide 4 − Zuora Confidential, not for distribution beyond
intended recipient

4
A Look at Price to Sales Ratios
Stock

Market Cap

Workday

17.26B

Price to Sales
TTM
42.94

Netsuite

8.68B

20.25

Salesforce.com

38.39B

10.25

FireEye

11.11B

Marketo

1.58B

62.59
Infinite

Adobe

33.77B

Informatica

4.49B

4.67

Oracle

172B

4.57

Slide 5 − Zuora Confidential, not for distribution beyond
intended recipient

16.52
pricing options
8.42
What about the Private Companies?
Stock

Est. Valuation

DropBox

10B

Box

2B

Docusign

1.65B

SurveyMonkey

1.3B

Zendesk

1B+

Zuora

N/A

Okta

N/A

Slide 6 − Zuora Confidential, not for distribution beyond
intended recipient

Infinite
pricing options
But These Are Trailing Indicators

Slide 7 − Zuora Confidential, not for distribution beyond
intended recipient
Why is The Subscription Model Better?

Slide 8 − Zuora Confidential, not for distribution beyond
intended recipient
1

Recurring Model Drives
a Real Relationship

Vendors can now understand
whether customer is getting value
Sometimes relationship is inherent,
other times it’s built

Slide 9 − Zuora Confidential, not for distribution beyond
intended recipient

Infinite
pricing options
2
1

Recurring revenue is
predicable

Infinite
pricing options
CRM

Slide 10 − Zuora Confidential, not for distribution beyond
intended recipient

NUAN
3
1

Customers are selecting
subscriptions

EIU data here

Infinite
pricing options

Slide 11 − Zuora Confidential, not for distribution beyond
intended recipient
4
1

Subscriptions are better
aligned with value

•
•
•

Easier to start
Can grow as usage grows
Consumption-based

Slide 12 − Zuora Confidential, not for distribution beyond
intended recipient
5
1

Recurring revenue
minimizes risk

• No more big bang multi-year projects
• 80% failure rate on big B2B
enterprise software projects
• A one year subscription for most
applications is less than an
enterprise POC

Slide 13 − Zuora Confidential, not for distribution beyond
intended recipient
6
1

Subscription drives
continuous innovation

• Ongoing enhancements

• Shared infrastructure
• Ability to collaboratively build solutions
• Consumers expect vendor to continually

earn the business

Infinite
pricing options

• The onus is on the vendor to provide
continuous value throughout my lifetime
as a customer
Slide 14 − Zuora Confidential, not for distribution beyond
intended recipient
What Are the Downsides?

1. Cash flow
2. Customers can move away quickly

3. The sales cycle never ends
4. If you can’t control churn the formula doesn’t work

Infinite
pricing options

Slide 15 − Zuora Confidential, not for distribution beyond
intended recipient
You Need To Touch
Your Customer

Slide 16 − Zuora Confidential, not for distribution beyond
intended recipient
How Does
This Work
in Real
Life?

Slide 17 − Zuora Confidential, not for distribution beyond
intended recipient

17
Several Integration Touchpoints in B2A
CRM
Provisioning
Entitlement

Website

Subscription Commerce
Product Catalog
Usage
Subscription Mgmt Billing Operations
Quotes & Orders Payment Operations
Renewals

Payment
Gateway

GL

Usage

A subscription business requires efficient process flows
Slide 18 − Zuora Confidential, not for distribution beyond
intended recipient
Case Study
KNOW

Docusign now has
complete visibility to

renewals across its
20 million users.
We now have all our metrics in one place from churn to
monthly account balances to growth.
Mike Dinsdale, Chief Financial Officer
Slide 19 − Zuora Confidential, not for distribution beyond
intended recipient
Z-Business is used by 500+
Subscription Economy customers
across multiple industries

High Tech

Devices

SaaS

Telecom

Slide 20 − Zuora Confidential, not for distribution beyond
intended recipient

Cloud
Infrastructure

Media

Education

Healthcare
20
Key Takeaways

1. Drives relationships
2. Makes your revenue more predictable
3. Customers like it better
4. Better alignment to valueInfinite

pricing options
5. Reduces risk for the customer
6. Drives innovation

Slide 21 − Zuora Confidential, not for distribution beyond
intended recipient
travis@zuora.com
@travishuch

Slide 22 − Zuora Confidential, not for distribution beyond
intended recipient

22
Slide 23 − Zuora Confidential, not for distribution beyond
intended recipient

23
Credits

•
•
•
•

What’s the Future of Business? - Brian Solis
PWC Global 100 Software Leaders - May 2013
Yahoo Finance
Pando Daily

http://pando.com/2013/05/21/memo-to-this-years-ycInfinite
class-its-damn-hard-to-build-an-enterprise-company/
pricing options

Slide 24 − Zuora Confidential, not for distribution beyond
intended recipient

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6 Reasons Subscription Companies Are Taking Over The World

  • 1. The 6 Reasons Subscription Companies are Taking Over the World Why Zuora Zuora Provides a BluePrint to Succeed in the Subscription Economy! B y Tr a v i s H u c h Z U O R A Slide 1 − Zuora Confidential, not for distribution beyond intended recipient
  • 2. Let’s Make this Interactive Poll: Who owns pricing of your products/services? (Group or Role) Q&A @zuora @travishuch Slide 2 − Zuora Confidential, not for distribution beyond intended recipient
  • 3. The Market Momentum of SaaS is Undeniable Slide 3 − Zuora Confidential, not for distribution beyond intended recipient
  • 4. You can have Subscription without SaaS, But you can’t have SaaS without Subscription Slide 4 − Zuora Confidential, not for distribution beyond intended recipient 4
  • 5. A Look at Price to Sales Ratios Stock Market Cap Workday 17.26B Price to Sales TTM 42.94 Netsuite 8.68B 20.25 Salesforce.com 38.39B 10.25 FireEye 11.11B Marketo 1.58B 62.59 Infinite Adobe 33.77B Informatica 4.49B 4.67 Oracle 172B 4.57 Slide 5 − Zuora Confidential, not for distribution beyond intended recipient 16.52 pricing options 8.42
  • 6. What about the Private Companies? Stock Est. Valuation DropBox 10B Box 2B Docusign 1.65B SurveyMonkey 1.3B Zendesk 1B+ Zuora N/A Okta N/A Slide 6 − Zuora Confidential, not for distribution beyond intended recipient Infinite pricing options
  • 7. But These Are Trailing Indicators Slide 7 − Zuora Confidential, not for distribution beyond intended recipient
  • 8. Why is The Subscription Model Better? Slide 8 − Zuora Confidential, not for distribution beyond intended recipient
  • 9. 1 Recurring Model Drives a Real Relationship Vendors can now understand whether customer is getting value Sometimes relationship is inherent, other times it’s built Slide 9 − Zuora Confidential, not for distribution beyond intended recipient Infinite pricing options
  • 10. 2 1 Recurring revenue is predicable Infinite pricing options CRM Slide 10 − Zuora Confidential, not for distribution beyond intended recipient NUAN
  • 11. 3 1 Customers are selecting subscriptions EIU data here Infinite pricing options Slide 11 − Zuora Confidential, not for distribution beyond intended recipient
  • 12. 4 1 Subscriptions are better aligned with value • • • Easier to start Can grow as usage grows Consumption-based Slide 12 − Zuora Confidential, not for distribution beyond intended recipient
  • 13. 5 1 Recurring revenue minimizes risk • No more big bang multi-year projects • 80% failure rate on big B2B enterprise software projects • A one year subscription for most applications is less than an enterprise POC Slide 13 − Zuora Confidential, not for distribution beyond intended recipient
  • 14. 6 1 Subscription drives continuous innovation • Ongoing enhancements • Shared infrastructure • Ability to collaboratively build solutions • Consumers expect vendor to continually earn the business Infinite pricing options • The onus is on the vendor to provide continuous value throughout my lifetime as a customer Slide 14 − Zuora Confidential, not for distribution beyond intended recipient
  • 15. What Are the Downsides? 1. Cash flow 2. Customers can move away quickly 3. The sales cycle never ends 4. If you can’t control churn the formula doesn’t work Infinite pricing options Slide 15 − Zuora Confidential, not for distribution beyond intended recipient
  • 16. You Need To Touch Your Customer Slide 16 − Zuora Confidential, not for distribution beyond intended recipient
  • 17. How Does This Work in Real Life? Slide 17 − Zuora Confidential, not for distribution beyond intended recipient 17
  • 18. Several Integration Touchpoints in B2A CRM Provisioning Entitlement Website Subscription Commerce Product Catalog Usage Subscription Mgmt Billing Operations Quotes & Orders Payment Operations Renewals Payment Gateway GL Usage A subscription business requires efficient process flows Slide 18 − Zuora Confidential, not for distribution beyond intended recipient
  • 19. Case Study KNOW Docusign now has complete visibility to renewals across its 20 million users. We now have all our metrics in one place from churn to monthly account balances to growth. Mike Dinsdale, Chief Financial Officer Slide 19 − Zuora Confidential, not for distribution beyond intended recipient
  • 20. Z-Business is used by 500+ Subscription Economy customers across multiple industries High Tech Devices SaaS Telecom Slide 20 − Zuora Confidential, not for distribution beyond intended recipient Cloud Infrastructure Media Education Healthcare 20
  • 21. Key Takeaways 1. Drives relationships 2. Makes your revenue more predictable 3. Customers like it better 4. Better alignment to valueInfinite pricing options 5. Reduces risk for the customer 6. Drives innovation Slide 21 − Zuora Confidential, not for distribution beyond intended recipient
  • 22. travis@zuora.com @travishuch Slide 22 − Zuora Confidential, not for distribution beyond intended recipient 22
  • 23. Slide 23 − Zuora Confidential, not for distribution beyond intended recipient 23
  • 24. Credits • • • • What’s the Future of Business? - Brian Solis PWC Global 100 Software Leaders - May 2013 Yahoo Finance Pando Daily http://pando.com/2013/05/21/memo-to-this-years-ycInfinite class-its-damn-hard-to-build-an-enterprise-company/ pricing options Slide 24 − Zuora Confidential, not for distribution beyond intended recipient