WELCOME TO      LONDON      October 20121
2    “Zuora Receives £36m    For European Expansion                             ”   November 17th, 2011
It all started with a simple idea    That there is a shift from products to services3
“   The global market for cloud        computing will grow from        $40.7 billion in 2011 to        more than $241 bill...
“        Carsharing subscriber        base to be 14 Million        in EU by 2020; 32                         ”        Mill...
“   By 2015, more        than 40 percent        of media and        digital-products        companies around        the wo...
BUY NOW                             Subscribe    The Past!                                 The Future    We	  Call	  this	...
Why	  the	  Subscrip2on	  Economy	  ?	      Technology	  Trends	              Demand	            Business	  Model	        ...
The	  	  Subscrip2on	  Economy	  	  is	  a	  	  Green	  Economy	                                                “         ...
The	  	  Subscrip2on	  Economy	  	  is	  about	  Customer	  Rela2onships	              Product Focused                    ...
The	  	  Subscrip2on	  Economy	  	  Requires	  a	  Completely	                 Different	  Approach	  to	  Building	  Busin...
The Media Industry is Moving to the     Subscription Economy12
The Tech Industry is Moving to     the Subscription Economy13
The Telecom Industry is Moving to the     Subscription Economy14
The Retail Industry is Moving to the     Subscription Economy15
Craft Coffee    SweetBox       Steepster       The Fruit Guys        Kiwi Crate          FabKids        Coffee       Choco...
Making the Web’s Subscription Economy Hum      “   As Web businesses embrace subscription          business models, the be...
“         The new realities of our increasingly         mobile economy make it more likely         that this transition fr...
Mar 4, 2012     “   Consumerism is being         redefined for the mobile age,         and the model is spreading among   ...
“   C.E.O.’s are beginning to         appreciate the value of recurring         revenue in a way never before … the       ...
21
22
Customer Satisfaction Graph – pie chart of           95% customer satisfaction23
24
Exponential Growth In Transaction Volume25
Strong Adoption in Large Enterprises             Educa2on	            Travel	  Services	            Cloud	  Services	     ...
27                       “     Q108	                   ARR     Q208	       Q308	       Q408	       Q109	       Q209	      ...
$12 25%      Billion                          Europe     Total	  Invoice	  Volume	     Total	  Invoice	  Volume	  28
YOU Are The Subscription Economy29
One Year Later     We are at the Tipping Point30
In 2008,     We Launched     Z-Billing     In 2010,     We Launched     Z-Commerce31
Last month, we introduced our     third major product32
1494	  A.D.	                     	        Luca	  Bartolomeo	                Pacioli	                       	              ...
For over 500 years, the system has worked…     Double	  entry	  accoun=ng	       To	  the	  CFOs	  of	  	       becomes	  ...
Until Now35
The Problem:     You Need to Differentiate Between One-Time               and Recurring Amounts      A $100 is a $100 is a...
The Problem:     You Want To Spread Revenue Over Time     The rules don’t allow     me to spread these     amounts over ti...
The Problem:     Your system doesn’t know what to do when               subscriptions change     I don’t have a rule for  ...
The Result:     Revenue managers are     drowning in spreadsheets     •    Revenue	  Recogni2on	       •    Subscrip2on	  ...
The Result:     It takes Weeks for finance teams     to close the books             “We	  need	  more	  2me”	             ...
The Result:     CFOs are maintaining 2 sets of books     “PwC	  will	  love	  these.”	                              Debit	...
The Result:     CMOs are prevented     from implementing     new innovations42
The Result:     CEOs have a hard time explaining their     success to Wall Street                     Page 1143
The Result:     And Wall Street fails to value Subscription               Businesses correctly                   “        ...
The world of Finance is broken…45
Introducing Z-Finance     The World’s first finance application built          for the Subscription Economy46
Z-Finance is built on a new foundation     Mul2	  dimensional	  Ledgers	     Spread	  revenue	  over	  2me	               ...
Define	  rules	  to	  manage	  complex	                               ✔   revenue	  recogni2on	  policies	                 ...
Define	  rules	  to	  manage	  complex	                           ✔   revenue	  recogni2on	  policies	                     ...
Create	  or	  import	  your	  chart	                                  ✔   of	  accounts	                                  ...
✔   Generate	  debit	  and	                            credit	  	  journal	  entries	  to	                            simp...
✔ Create	  custom	  user	  roles	       Reuse the audit                	                                      	       peac...
Tames your revenue                               recognition processes     Upgrades,	  downgrades,	  cancella2ons,	       ...
Unburdens your finance                           team, enabling your growth     Unleash	  your	  growth	  strategies	  wit...
Gives you audit peace of                             mind     Rapidly	  review	  details	  of	  any	  transac2on	         ...
•  300 accounting periods        created     •  Over 5 million financial        transactions analyzed     •  207 accountin...
57
58
59
Subscribe60
Chasm	                     The Future     The Present61
Why Can’t I Make                         My Processes     Why is it so hard                      Why Can’t I Find         ...
Product   Relationships63
Goal:            Goal:     Ship More Units   Build Valuable                       Relationships64
The Strategies Required to     Grow a Subscription Business     are Very Different65
Product Business     Design         Make       Sell     Product       Product   Product66
Subscription Business                             Increase the Value of Your                                    Customers ...
Packaging	  &	  Pricing	      Acquire	  New	     Increase	  Value	  Per	     Reduce	  Churn	       Strategy	              ...
Your Existing Systems     Can’t Support the Pricing &     Packaging     You Need to Grow69
The Processes Required to     Make a Subscription Business     Flow are Very Different70
Product Business      Quote-To-Cash71
Subscription Business      Quote-To-Cash      Renewals      Payment Failures      Account Suspension      Amendments      ...
Product Business        Commerce	        Billing	      Finance	             	                	             	             	...
Subscription Business74
Subscription Business75
Subscription Business76
Subscription Business77
78
Subscription Business                    Billing       Commerce               Finance79
Your Existing Systems     Can’t Support the Processes     Needed To Make Your     Business Flow80
What you Need to Know with a     Subscription Business Model     is Very Different81
Traditional Income Statement82
Revenue          ARR                    $100     $083
Subscription Economy     Income Statement           ARR                $100            Churn              (10)   Retention...
The Three Key Metrics of the     Subscription Economy           Retention                   Recurring                     ...
Your Existing Systems     Don’t Have the Metrics You     Need to Know86
I Need a System That Helps     me Grow , Flow and Know in     the Subscription Economy87
Your Systems Today        CRM	       ERP	     GL                               	  88
Products   Relationships89
Goal: Build     Goal: Ship                    Valuable     More Units                  Relationships90
Enterprise   Relationship     Resource      Business      Planning    Management91
We’re Here Today to Announce              Z-Business,     The World’s First Relationship     Business Management System92
Z-­‐Business	  	  Is	  Built	  On	  a	  Founda2on	  For	  the	       Subscrip2on	  Economy	  93
Z-­‐Business	  	  Solves	  Your	  Rela2onship	  Commerce	       Needs	  94
Z-­‐Business	  	  Automates	  Your	  Billing	  and	       Payment	  Processes	  95
Z-­‐Business	  	  Revolu2onizes	  your	  Finance	       Opera2ons	  96
Z-­‐Business	  	  Plugs	  Into	  Your	  CRM	  and	  GL	  97
Z-­‐Business	  	  Helps	  You	  Grow,	  Flow	  and	  Know	       Our	  Mission:	  	       Help	  you	  succeed	  in	  the	...
thank	  you.                 	  99
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Subscribed UK: CEO's Keynote

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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.

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Subscribed UK: CEO's Keynote

  1. 1. WELCOME TO LONDON October 20121
  2. 2. 2 “Zuora Receives £36m For European Expansion ” November 17th, 2011
  3. 3. It all started with a simple idea That there is a shift from products to services3
  4. 4. “ The global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in ” 2020. Forrester4
  5. 5. “ Carsharing subscriber base to be 14 Million in EU by 2020; 32 ” Million worldwide Frost & Sullivan5
  6. 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 Gartner6
  7. 7. BUY NOW Subscribe The Past! The Future We  Call  this  Shi,  the  Subscrip2on  Economy™  7
  8. 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 Subscribe8
  9. 9. The    Subscrip2on  Economy    is  a    Green  Economy   “ The average car is idle ” 92% of the time9
  10. 10. The    Subscrip2on  Economy    is  about  Customer  Rela2onships   Product Focused Rela2onship  Focused   BUY NOW Subscribe10
  11. 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. 12. The Media Industry is Moving to the Subscription Economy12
  13. 13. The Tech Industry is Moving to the Subscription Economy13
  14. 14. The Telecom Industry is Moving to the Subscription Economy14
  15. 15. The Retail Industry is Moving to the Subscription Economy15
  16. 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 Guide16
  17. 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, 201217
  18. 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. 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 this19 new era of cooperative capitalism ”
  20. 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, 201220
  21. 21. 21
  22. 22. 22
  23. 23. Customer Satisfaction Graph – pie chart of 95% customer satisfaction23
  24. 24. 24
  25. 25. Exponential Growth In Transaction Volume25
  26. 26. Strong Adoption in Large Enterprises Educa2on   Travel  Services   Cloud  Services   Media   Telecom  26
  27. 27. 27 “ Q108   ARR Q208   Q308   Q408   Q109   Q209   Q309   subscription systems. Q409   Q110   ” Q210   Q310   Q410   In short order, Zuora has become Q111   the dominant player in cloud-based Q211   Q311   Q411   Q112   Q212   Q312   Q412   Q113   The Fastest Growing SaaS Company Q213  
  28. 28. $12 25% Billion Europe Total  Invoice  Volume   Total  Invoice  Volume  28
  29. 29. YOU Are The Subscription Economy29
  30. 30. One Year Later We are at the Tipping Point30
  31. 31. In 2008, We Launched Z-Billing In 2010, We Launched Z-Commerce31
  32. 32. Last month, we introduced our third major product32
  33. 33. 1494  A.D.     Luca  Bartolomeo   Pacioli       invents  the  system  of   Double  Entry   Bookkeeping  33
  34. 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. 35. Until Now35
  36. 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. 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. 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. 39. The Result: Revenue managers are drowning in spreadsheets •  Revenue  Recogni2on   •  Subscrip2on  Metrics  (MRR,  ARR,  CLTV)   •  Changes,  Adjustments,  Credits   •  Complex  Recurring  Billing  39
  40. 40. The Result: It takes Weeks for finance teams to close the books “We  need  more  2me”   - Finance Team40
  41. 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. 42. The Result: CMOs are prevented from implementing new innovations42
  43. 43. The Result: CEOs have a hard time explaining their success to Wall Street Page 1143
  44. 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. 45. The world of Finance is broken…45
  46. 46. Introducing Z-Finance The World’s first finance application built for the Subscription Economy46
  47. 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. 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 close48
  49. 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 rules49
  50. 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 lifecycle50
  51. 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 team51
  52. 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 mind52
  53. 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 ViewQwest53
  54. 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 Autotask54
  55. 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 Firehost55
  56. 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 Colonnade56
  57. 57. 57
  58. 58. 58
  59. 59. 59
  60. 60. Subscribe60
  61. 61. Chasm   The Future The Present61
  62. 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 KNOW62
  63. 63. Product Relationships63
  64. 64. Goal: Goal: Ship More Units Build Valuable Relationships64
  65. 65. The Strategies Required to Grow a Subscription Business are Very Different65
  66. 66. Product Business Design Make Sell Product Product Product66
  67. 67. Subscription Business Increase the Value of Your Customers Acquire New Customers Reduce Churn67
  68. 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. 69. Your Existing Systems Can’t Support the Pricing & Packaging You Need to Grow69
  70. 70. The Processes Required to Make a Subscription Business Flow are Very Different70
  71. 71. Product Business Quote-To-Cash71
  72. 72. Subscription Business Quote-To-Cash Renewals Payment Failures Account Suspension Amendments Account Management72
  73. 73. Product Business Commerce   Billing   Finance               Book Order Invoice & Recognize & Ship It Collect For It It73
  74. 74. Subscription Business74
  75. 75. Subscription Business75
  76. 76. Subscription Business76
  77. 77. Subscription Business77
  78. 78. 78
  79. 79. Subscription Business Billing Commerce Finance79
  80. 80. Your Existing Systems Can’t Support the Processes Needed To Make Your Business Flow80
  81. 81. What you Need to Know with a Subscription Business Model is Very Different81
  82. 82. Traditional Income Statement82
  83. 83. Revenue ARR $100 $083
  84. 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 $13084
  85. 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. 86. Your Existing Systems Don’t Have the Metrics You Need to Know86
  87. 87. I Need a System That Helps me Grow , Flow and Know in the Subscription Economy87
  88. 88. Your Systems Today CRM   ERP   GL  88
  89. 89. Products Relationships89
  90. 90. Goal: Build Goal: Ship Valuable More Units Relationships90
  91. 91. Enterprise Relationship Resource Business Planning Management91
  92. 92. We’re Here Today to Announce Z-Business, The World’s First Relationship Business Management System92
  93. 93. Z-­‐Business    Is  Built  On  a  Founda2on  For  the   Subscrip2on  Economy  93
  94. 94. Z-­‐Business    Solves  Your  Rela2onship  Commerce   Needs  94
  95. 95. Z-­‐Business    Automates  Your  Billing  and   Payment  Processes  95
  96. 96. Z-­‐Business    Revolu2onizes  your  Finance   Opera2ons  96
  97. 97. Z-­‐Business    Plugs  Into  Your  CRM  and  GL  97
  98. 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. 99. thank  you.  99
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