In my extensive writing around the subscription billing space, I have often noted that it is a very polarized sector of our industry with a handful of well funded companies providing services for large organizations – Zuora, Vindicia and Aria fit in this space. These companies are maneuvering for position and finding ways to out pace each other. Many of the initiatives I hear about are new partnerships designed to spread their message ever further.
Given this background, it’s interesting to hear of Zuora’s announced partnership with FinancialForce, Intacct and Sage – seeing it now embedded in all the major mid-sized accounting products. It’s an interesting move and one which sees Zuora take a subtle shift to more of a best-of-breed rather than a suite approach.
Previously Zuora had announced a partnership with NetSuite – since that time NetSuite has started talking about its own offerings in the subscription and billing space. It is no coincidence then that these announcements are all coming on the day before NetSuite’s global conference, SuiteWorld. No coincidence also that Zuora is not sponsoring SuiteWorld – if you sense a subtle parting of the ways there you’re probably not far from the truth. This marks a conscious shift for Zuora who is now talking about a best of breed approach and moving away from the “one suite to rule them all” message that NetSuite prefers. If there was any doubt about the significance of both the timing and the messaging of this news, Zuora clarified that by including a covering note from CEO Tien Tzuo in which he writes “…finance departments and CFOs look to retool their companies for the subscription economy, they want best of breed” – fighting words indeed.
With this move, Zuora is integrated into FinancialForce, Intacct, Sage, Workday and NetSuite – their aim is to help CFOs, no matter what financial software they use, navigate the growing importance of the subscription economy. Zuora’s net position is that financial systems cannot cope with the complexity of modern commerce, specifically the dynamic nature of;
- Pricing offering customers multiple price plans, bundles with one-time, recurring and usage fees, and pay-as-you-go pricing;
- Relationship commerce for the ongoing subscription lifecycle which includes the initial order, change orders, add-ons and renewals;
- Automated subscription billing and payments high volume for B2C businesses or more complex B2B businesses; and
- Forward-looking subscription metrics to forecast future revenues and growth.
If the messaging from Zuora itself wasn’t strong enough, the CEO of Intacct, Robert Reid, came out with the announcement with both guns blazing in NetSuite’s direction saying;
Our alliance and this new framework enable joint customers to realize the true value of Zuora and Intacct together. This is a perfect example of how cloud
computing makes it easier for companies to select integrated best-of-breed systems like Intacct and Zuora, instead of being forced into a suite of average products from one
While there is much that goes on this space that can be simply put down to positioning and maketing, the fact that with this announcement Zuora is integrated into all the financial systems that matter is another indication that they are becoming the vendor of choice. While it is true that everyone in this space has a different focus (Vindicia for example is well ingrained in gaming), Zuora is rapidly becoming the de facto standard – a position that sets them up well for strategic moves (either an IPO or trade sale) in the short to medium term.
(Cross-posted @ The Diversity Blog – SaaS, Cloud & Business Strategy)