Recurring Billing – Build vs. Buy

December 3, 2008

by K. V. Rao


There are so many emails, articles, television news stories – you name it – beginning with “In these economic times…” and continuing with a negative or depressing story about businesses suffering.


At Zuora, we don’t claim to have the answer to bailouts or the housing crisis, but we do consider ourselves experts in SaaS and subscription businesses. Popular during the first tech downturn and again during the offshore outsourcing craze, the Build v. Buy debate is back.


From our perspective, it makes perfect sense to reengage in this discussion – it’s something we discuss with our customers and prospects on a near daily basis.


What you build, you should sell.


Our customers are realizing they are diverting precious resources into critical, but non-core activities like subscriber management, billing, and payments instead of dedicating them to building and enhancing differentiation in core products. They fall behind in product differentiation and competitive advantage leading to loss of market share and revenue when operational laundry lists and details are usurping time that could be spent on revenue-generating activities.


What you can’t sell, you should buy (or preferably subscribe).


This becomes even more important in tough economic times, when businesses get lean and mean, regain focus on building differentiation in the core business, and divest non-core activities or outsource them.


Today, business agility is made easier by advances in cloud computing, SaaS, and service oriented architectures. These technology trends are making it easier and easier to plug and play best of breed components without having to re-invent or re-build everything.


And with pay-as-you-go pricing (also re-emerging with consumers in the form of ‘layaway’), the price is right as well!!!


Most of our customers get it – they chose to invest their precious development resources in gaining market leadership in their chosen domain, be it marketing tools like Marketo, online analytics like Coremetrics, or online storage like, they made the wise decision to subscribe to our billing service instead of building this critical (but not core) functionality themselves.


Subscription-based services are becoming a strategic advantage, especially in this economy. With the availability of subscription-based offerings for everything from cloud computing (Amazon Web Services) to payroll (ADP, Paycycle) to billing (Zuora!), today’s businesses have no excuse. There is enormous flexibility, efficiency, cost-effectiveness and business agility just a few mouse clicks away.