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 Subscribed.com.
2. 2
“ Zuora Receives £36m
For International 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 Shift the Subscription Economy™
7
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
Subscribe
8
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 Guide
17
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, 2012
18
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. 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
20
new era of cooperative capitalism
”
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, 2012
21
27. Strong Adoption in Large Enterprises
Education
Travel Services
Cloud Services
Media
Telecom
27
28. The Fastest Growing SaaS Company
“ In short order, Zuora has become
the dominant player in cloud-based
subscription systems.
”
ARR
Q1'08
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q1'10
Q3'10
Q4'10
Q3'09
Q4'09
Q2'10
Q1'11
Q2'11
Q3'11
Q4'11
Q2'13
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
28
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. 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. 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. The Result:
Revenue managers are
drowning in spreadsheets
• Revenue Recognition
• Subscription Metrics (MRR, ARR, CLTV)
• Changes, Adjustments, Credits
• Complex Recurring Billing
40
41. The Result:
It takes Weeks for finance teams
to close the books
“We need more time”
- Finance Team
41
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. The Result:
CMOs are prevented
from implementing
new innovations
43
44. The Result:
CEOs have a hard time explaining their
success to Wall Street
Page 11
44
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
48. Introducing Z-Finance
The World’s first finance application built
for the Subscription Economy
48
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 changes
49
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 close
50
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 rules
51
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 lifecycle
52
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 team
53
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 mind
54
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 ViewQwest
55
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 Autotask
56
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 Firehost
57
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 Colonnade
58
68. Subscription Business
Increase the Value of Your
Customers
Acquire New Customers
Reduce Churn
68
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 X
69
70. Your Existing Systems
Can’t Support the Pricing &
Packaging Strategies
You Need to Grow
70
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 $130
85
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 Computing
86
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. Let’s Take a Look at The Future of the
Subscription Economy
101
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 Ops
103
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. ‘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
controls
105
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 Business
106
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 Ops
107
108. The World’s First Integrated
Relationship Business Management
System
108
110. Welcome.
Don’t forget to tweet!
#SubscribedAUS
Zuora will donate
$5
to
CanTeen.org.au
For every tweet tagged with the
Subscribed hashtag
110
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
http://guidebook.com/getit/
111
113. Sponsors.
Thank you to our sponsors: Bluewolf, Scout Analytics and ProQuest
If you didn't have a chance to visit their demo stations this morning,
please do so during lunch.
www.scoutanalytics.com
www.proquestit.com www.bluewolf.com
113
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 …