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.

1. WELCOME TO
SYDNEY
1 November 2012

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

9. The Subscription Economy is a Green Economy
“
The average car is idle
”
92% of the time
9

10. 20th Century Distribution Model
Build It Pack It Ship It Sell It
Manufacturer Retailer Customer
Wholesaler Distributor
10

11. Today’s Model is Different
YOU Customers,
Prospects, Friends,
Customer
& Family
11

12. The Subscription Economy is about Customer Relationships
Product Focused Relationship Focused
BUY NOW Subscribe
12

13. The Media Industry is Moving to the
Subscription Economy
13

14. The Tech Industry is Moving to
the Subscription Economy
14

15. The Telecom Industry is Moving to the
Subscription Economy
15

16. The Retail Industry is Moving to the
Subscription Economy
16

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

22. 22

23. 23

24. Customer Satisfaction Graph – pie chart of
95% customer satisfaction
24

25. 25

26. Exponential Growth In Transaction Volume
26

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

29. Billion
Total Invoice Volume
29

30. YOU Are The Subscription Economy
30

31. One Year Later
We are at the Tipping Point
31

32. In 2008,
We Launched
Z-Billing
In 2010,
We Launched
Z-Commerce
32

33. Last month, we introduced our
third major product
33

34. 1494 A.D.
Luca Bartolomeo
Pacioli
invents the system of
Double Entry
Bookkeeping
34

35. For over 500 years, the system has worked…
Double entry accounting To the CFOs of
becomes the cornerstone
of modern accounting the modern era
35

36. Until Now
36

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

46. The world of Finance is broken…
46

47. It’s Time to Fix It …
47

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

59. 59

60. 60

61. Subscribe
61

62. Chasm
The Future
The Present
62

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 KNOW
63

64. Product Relationships
64

65. Goal: Goal:
Ship More Units Build Valuable
Relationships
65

66. The Strategies Required to
Grow a Subscription Business
are Very Different
66

67. Product Business
Design Make Sell
Product Product Product
67

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

71. The Processes Required to
Make a Subscription Business
Flow are Very Different
71

72. Product Business
Quote-To-Cash
72

73. Subscription Business
Quote-To-Cash
Renewals
Payment Failures
Account Suspension
Amendments
Account Management
73

74. Product Business
Commerce Billing Finance
Book Order Invoice & Recognize
& Ship It Collect For It It
74

75. Subscription Business
75

76. Subscription Business
76

77. Subscription Business
77

78. Subscription Business
78

79. 79

80. Subscription Business
Billing
Commerce Finance
80

81. Your Existing Systems
Can’t Support the Processes
Needed To Make Your
Business Flow
81

82. What you Need to Know with a
Subscription Business Model
is Very Different
82

83. Traditional Income Statement
83

84. Revenue ARR
$100
$0
84

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

87. Your Existing Systems
Don’t Have the Metrics You
Need to Know
87

88. How do you run a
customer focused
company…
…with systems
meant for the
old world?
88

89. You Need a System That Helps
You Grow , Flow and Know in
the Subscription Economy
89

90. Your Systems Today
CRM ERP GL
90

91. Products Relationships
91

92. Goal: Build
Goal: Ship
Valuable
More Units
Relationships
92

93. Enterprise Relationship
Resource Business
Planning Management
93

94. We’re Here Today to Announce
Z-Business,
The World’s First Relationship
Business Management System
94

95. Z-Business Is Built On a Foundation For the
Subscription Economy
95

96. Z-Business Solves Your Relationship Commerce
Needs
96

97. Z-Business Automates Your Billing and
Payment Processes
97

98. Z-Business Revolutionizes your Finance
Operations
98

99. Z-Business Plugs Into Your CRM and GL
99

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

102. INTRODUCING
Zuora Product Demo
102

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

109. WELCOME TO
SYDNEY
109 November 2012

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

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 Salesforce.com
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 Remarks
112

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

114. WELCOME TO
SYDNEY
114 November 2012