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

Why ZuoraZuora Provides a BluePrint to Succeed in the

Subscription Economy!

The 6 Reasons Subscription Companies are Taking Over the World

By Travis Huch ZUORA

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Let’s Make this Interactive

Poll: Who owns pricing of your products/services? (Group or Role)

Q&A

@zuora @travishuch

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The Market Momentum of SaaS is Undeniable

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You can have Subscription without SaaS,

But you can’t have SaaS without Subscription

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Infinite pricing options

A Look at Price to Sales Ratios

Stock Market Cap Price to Sales TTM

Workday 17.26B 42.94

Netsuite 8.68B 20.25

Salesforce.com 38.39B 10.25

FireEye 11.11B 62.59

Marketo 1.58B 16.52

Adobe 33.77B 8.42

Informatica 4.49B 4.67

Oracle 172B 4.57

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Infinite pricing options

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

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But These Are Trailing Indicators

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Why is The Subscription Model Better?

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Recurring Model Drives a Real Relationship

Vendors can now understand whether customer is getting value

Sometimes relationship is inherent, other times it’s built

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Recurring revenue is predicable12

CRM NUAN

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EIU data here

Customers are selecting subscriptions13

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• Easier to start • Can grow as usage grows • Consumption-based

Subscriptions are better aligned with value14

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• 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

Recurring revenue minimizes risk15

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Infinite pricing options

• Ongoing enhancements

• Shared infrastructure

• Ability to collaboratively build solutions

• Consumers expect vendor to continually

earn the business

• The onus is on the vendor to provide

continuous value throughout my lifetime

as a customer

Subscription drives continuous innovation16

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Infinite pricing options

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

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You Need To Touch Your Customer

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How Does This Work in Real Life?

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A subscription business requires efficient process flows

Website

CRM

Usage

PaymentGateway

GL

ProvisioningEntitlement

Subscription CommerceProduct Catalog

Subscription MgmtQuotes & Orders

UsageBilling Operations

Payment OperationsRenewals

Several Integration Touchpoints in B2A

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Case Study

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

KNOW

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Z-Business is used by 500+ Subscription Economy customers

across multiple industries

High Tech SaaS Cloud Infrastructure

TelecomDevices

Media

Education Healthcare

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Infinite pricing options

Key Takeaways

1. Drives relationships

2. Makes your revenue more predictable

3. Customers like it better

4. Better alignment to value

5. Reduces risk for the customer

6. Drives innovation

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travis@zuora.com@travishuch

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Infinite pricing options

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-yc-class-its-damn-hard-to-build-an-enterprise-company/