Subscribed Sydney: CEO's Keynote


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Zuora's CEO's Keynote for Subscribed Sydney. Subscribed 2012 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

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  • So there you have it. Z-Business, the world's first relationship business management system. Offering fully integrated commerce, billing and finance that puts your relationships with your customers at the center of your business.Thanks everyone for your time - this was a lot of fun for all of us up here. All of us would love to meet as many of you as we can here today…For myself, I hope today marks the beginning of a long and productive relationship with each and every one of you and the companies you are a part of.
  • The month end close process for subscription companies spans multiple time dimensions. You’re dealing with items billed in advance, billed in arrears, and mid-month cancellations …
  • The month end close process for subscription companies spans multiple time dimensions. You’re dealing with items billed in advance, billed in arrears, and mid-month cancellations …
  • Subscribed Sydney: CEO's Keynote

    1. 1. WELCOME TO SYDNEY1 November 2012
    2. 2. 2 “ Zuora Receives £36m For International 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 Shift the Subscription Economy™7
    8. 8. Why the Subscription 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 Subscription Economy is a Green Economy “ The average car is idle ” 92% of the time9
    10. 10. 20th Century Distribution Model Build It Pack It Ship It Sell It Manufacturer Retailer Customer Wholesaler Distributor10
    11. 11. Today’s Model is Different YOU Customers, Prospects, Friends, Customer & Family11
    12. 12. The Subscription Economy is about Customer Relationships Product Focused Relationship Focused BUY NOW Subscribe12
    13. 13. The Media Industry is Moving to the Subscription Economy13
    14. 14. The Tech Industry is Moving to the Subscription Economy14
    15. 15. The Telecom Industry is Moving to the Subscription Economy15
    16. 16. The Retail Industry is Moving to the Subscription Economy16
    17. 17. 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 Spotify Sitter 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 Fishing Accessories Dresses Toys/Activities Equipment Sweet Petula McSweeneys Meundies Dollar Rubber Club Bespoke Post Spice Guides Soaps Shirts Underwear Condoms Luxury Items Date Idea Guide17
    18. 18. 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, 201218
    19. 19. “ 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.19
    20. 20. 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 this20 new era of cooperative capitalism ”
    21. 21. “ 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, 201221
    22. 22. 22
    23. 23. 23
    24. 24. Customer Satisfaction Graph – pie chart of 95% customer satisfaction24
    25. 25. 25
    26. 26. Exponential Growth In Transaction Volume26
    27. 27. Strong Adoption in Large Enterprises Education Travel Services Cloud Services Media Telecom27
    28. 28. The Fastest Growing SaaS Company “ In short order, Zuora has become the dominant player in cloud-based subscription systems. ” ARR Q108 Q208 Q308 Q408 Q109 Q209 Q110 Q310 Q410 Q309 Q409 Q210 Q111 Q211 Q311 Q411 Q213 Q112 Q212 Q312 Q412 Q11328
    29. 29. Billion Total Invoice Volume29
    30. 30. YOU Are The Subscription Economy30
    31. 31. One Year Later We are at the Tipping Point31
    32. 32. In 2008, We Launched Z-Billing In 2010, We Launched Z-Commerce32
    33. 33. Last month, we introduced our third major product33
    34. 34. 1494 A.D. Luca Bartolomeo Pacioli invents the system of Double Entry Bookkeeping34
    35. 35. For over 500 years, the system has worked… Double entry accounting To the CFOs of becomes the cornerstone of modern accounting the modern era35
    36. 36. Until Now36
    37. 37. 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.37
    38. 38. 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.38
    39. 39. 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…39
    40. 40. The Result: Revenue managers are drowning in spreadsheets • Revenue Recognition • Subscription Metrics (MRR, ARR, CLTV) • Changes, Adjustments, Credits • Complex Recurring Billing40
    41. 41. The Result: It takes Weeks for finance teams to close the books “We need more time” - Finance Team41
    42. 42. 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.42
    43. 43. The Result: CMOs are prevented from implementing new innovations43
    44. 44. The Result: CEOs have a hard time explaining their success to Wall Street Page 1144
    45. 45. 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.45
    46. 46. The world of Finance is broken…46
    47. 47. It’s Time to Fix It …47
    48. 48. Introducing Z-Finance The World’s first finance application built for the Subscription Economy48
    49. 49. Z-Finance is built on a new foundation Multi dimensional Ledgers Spread revenue over time Differentiate between one time and Intelligent Algorithms recurring revenue Revolutionary Data Model Calculates key subscription metrics Powerful Rules Engine Adapts to subscription changes49
    50. 50. Define rules to manage complex ✔ revenue recognition policies Tag charges with revenue revenue ✔ and deferred revenue GL accounts Tag charges with with revenue ✔ recognition rules Control revenue recognition trigger ✔ dates View earned and deferred revenue ✔ reports Accounting Close Tools tools to accelerate your month end close50
    51. 51. Define rules to manage complex ✔ revenue recognition policies Tag charges with revenue ✔ revenue and deferred revenue GL accounts Tag charges with with revenue ✔ recognition rules ✔ Control revenue recognition trigger dates View earned and deferred ✔ revenue reports Revenue Recognition Tools that handle complex revenue rules51
    52. 52. Create or import your chart ✔ of accounts ✔ Tag charges with GL account codes Tag transactions such as ✔ payments, credits, refunds, a djustments etc with GL account codes Chart of Accounts to track charges through the revenue lifecycle52
    53. 53. ✔ 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 team53
    54. 54. ✔ 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 actions on ✔ sensitive financial data Tight Security Controls for audit peace of mind54
    55. 55. Tames your revenue recognition processes Upgrades, downgrades, cancellations, refu nds 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 ViewQwest55
    56. 56. 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 Autotask56
    57. 57. Gives you audit peace of mind Rapidly review details of any transaction from closed accounting periods “ …they have nailed it with Z- Finance, providing the next level of ” audit friendly automation … Bruce McFadyen, CFO of Firehost57
    58. 58. • 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 Colonnade58
    59. 59. 59
    60. 60. 60
    61. 61. Subscribe61
    62. 62. Chasm The Future The Present62
    63. 63. 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 KNOW63
    64. 64. Product Relationships64
    65. 65. Goal: Goal: Ship More Units Build Valuable Relationships65
    66. 66. The Strategies Required to Grow a Subscription Business are Very Different66
    67. 67. Product Business Design Make Sell Product Product Product67
    68. 68. Subscription Business Increase the Value of Your Customers Acquire New Customers Reduce Churn68
    69. 69. Packaging & Pricing Acquire New Increase Value Per Reduce Churn Strategy Customers Customer Launch First Product X Add-on Options X Monthly vs Annual X X X Options Higher Editions X X Lower Editions X X Product Bundles X Pricing Tiers X X Usage & Overage X X X Multiple Currencies X X Renewals X Pricing Changes X X Regional Pricing X69
    70. 70. Your Existing Systems Can’t Support the Pricing & Packaging Strategies You Need to Grow70
    71. 71. The Processes Required to Make a Subscription Business Flow are Very Different71
    72. 72. Product Business Quote-To-Cash72
    73. 73. Subscription Business Quote-To-Cash Renewals Payment Failures Account Suspension Amendments Account Management73
    74. 74. Product Business Commerce Billing Finance Book Order Invoice & Recognize & Ship It Collect For It It74
    75. 75. Subscription Business75
    76. 76. Subscription Business76
    77. 77. Subscription Business77
    78. 78. Subscription Business78
    79. 79. 79
    80. 80. Subscription Business Billing Commerce Finance80
    81. 81. Your Existing Systems Can’t Support the Processes Needed To Make Your Business Flow81
    82. 82. What you Need to Know with a Subscription Business Model is Very Different82
    83. 83. Traditional Income Statement83
    84. 84. Revenue ARR $100 $084
    85. 85. 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 $13085
    86. 86. 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 Computing86
    87. 87. Your Existing Systems Don’t Have the Metrics You Need to Know87
    88. 88. How do you run a customer focused company… …with systems meant for the old world?88
    89. 89. You Need a System That Helps You Grow , Flow and Know in the Subscription Economy89
    90. 90. Your Systems Today CRM ERP GL90
    91. 91. Products Relationships91
    92. 92. Goal: Build Goal: Ship Valuable More Units Relationships92
    93. 93. Enterprise Relationship Resource Business Planning Management93
    94. 94. We’re Here Today to Announce Z-Business, The World’s First Relationship Business Management System94
    95. 95. Z-Business Is Built On a Foundation For the Subscription Economy95
    96. 96. Z-Business Solves Your Relationship Commerce Needs96
    97. 97. Z-Business Automates Your Billing and Payment Processes97
    98. 98. Z-Business Revolutionizes your Finance Operations98
    99. 99. Z-Business Plugs Into Your CRM and GL99
    100. 100. Z-Business Helps You Grow, Flow and Know Our Mission: Help you succeed in the Subscription Economy GROW: FLOW: KNOW: Build and grow your Run and flow your Have the right metrics to subscription business subscription business optimize your and revenue. processes efficiently. subscription business.100
    101. 101. Let’s Take a Look at The Future of the Subscription Economy101
    102. 102. INTRODUCING Zuora Product Demo102
    103. 103. Process And Systems Landscape For A Subscription Business Finance General Ledgers Sales Reps & Accounting Account CRM & Finance Managers Commerce Product Marketing Billing Website user E-Commerce Payment Gateways Billing Ops103
    104. 104. Today’s Demo Centers Around The Story Of Zimple Backup Services Ltd. B A C K U P S E RV I C E S LT D .104
    105. 105. ‘s Opportunities ‘s Challenges Sells backup solutions to B2B and B2C business is in 2 businesses and consumers different disparate systems Sells through multiple channels (web, assisted, partners etc) Each channel is a silo Gaining popularity in Asia and US Can’t handle global currency and tax Multiple payment choices can Can’t manage multiple win additional market share payment types at scale Transaction volume doubling Taking longer (17 days) to every quarter close the books Want to go public in 18 months No proper finance and audit controls105
    106. 106. Today You’ll See How 1 A Flexible Pricing Engine Supports Multiple Market Segments 2 A Single System Supports Multi-Channel Commerce Rating, Billing, Taxation and Collections Are Automated 3 Across Geographies The Accounting Close Process Is Accelerated While Still 4 Maintaining Tight Financial Controls Key Subscription Metrics Give You Unique Insights Into The 5 Health Of Your Business106
    107. 107. Z-Business: A Complete And Integrated System To Manage All Your Subscription Processes Finance General Ledgers Sales Reps & Accounting Account CRM & Finance Managers Commerce Product Marketing Billing Website user E-Commerce Payment Gateways Billing Ops107
    108. 108. The World’s First Integrated Relationship Business Management System108
    109. 109. WELCOME TO SYDNEY109 November 2012
    110. 110. Welcome. Don’t forget to tweet! #SubscribedAUS Zuora will donate $5 to For every tweet tagged with the Subscribed hashtag110
    111. 111. Welcome. Get all the Subscribed info you need – on your phone Get Your Guidebook 1) Go to your mobile App Store. 2) Search “Guidebook” & install. 3) Click on "download guide” (bottom left corner) you can text it to yourself here: 4) Redeem Code: SubscribedAU
    112. 112. Welcome. Agenda 8:00 – 9:00am Check-In / Coffee 9:00 - 10:30am Zuora Keynote 10:30 – 11:00am Morning Break 11:00 – 11:15am 11:15 – 11:45am Fairfax 11:45 – 12:15pm Servcorp 12:15 – 1:45pm Networking Lunch 1:45 – 2:45pm Guest Keynote 2:45 – 3:00pm Closing Remarks112
    113. 113. Sponsors. Thank you to our sponsors: Bluewolf, Scout Analytics and ProQuest If you didnt have a chance to visit their demo stations this morning, please do so during lunch. www.bluewolf.com113
    114. 114. WELCOME TO SYDNEY114 November 2012