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“Subscription economy" will drive new tech platforms: Zuora CEO

“Subscription economy" will drive new tech platforms: Zuora CEO

Popularity of services-based, pay-per-use products among consumers and businesses customers will fuel the shift

We are living in an age of “subscription economy” that will see more and more businesses adopt services and subscription-based business models, diversifying away from old-style manufacturing and shipping, according to Zuora founder and CEO, Tien Tzuo.

Tzuo, formerly chief strategy officer at Salesforce.com, was speaking in Sydney while announcing the adoption of its platform by ASX-listed Servcorp, a virtual office space provider, to help it launch Gnee, a subscription-based telephone auto attendant service aimed at the SMB market in Australia and Japan.

Zuora is a Silicon Valley-based subscription billing and commerce services company that was founded by Tzuo in 2007, and is backed by venture capital.

"We are seeing industry after industry shifting their business models,” he said noting the growing popularity of services-based, pay-per-use services among consumer products and businesses customers, as well as the success of pay-per-use Zip cars in the US and online movie rental service Netflix.

ERP systems like SAP and Oracle worked for the manufacturing era but structural changes into a more services-type business will make pay-per-use increasingly common in the new economy, he said.

Tzuo predicts "mass upgrades away from SAP and Oracle” that will foster new technology supporting the new model.

“The industry will be shocked at how fast this shift will happen,” he said.

Zuora will also seek an initial public offering or IPO in the next two years, Tzuo said.

“If we grow at 100 per cent in the next two years, we will be in a good position for an IPO,” he said.

Zuora most recently opened an office in Australia this May. Zuora’s platform has been used by Cloud services provider Ninefold in Australia and Quotify, a provider of request for quote services.

Zuora is backed by venture capital firms Benchmark Capital, Shasta Ventures, Index Ventures, Redpoint Ventures, and Greylock Partners.


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