What the Zuora Acquisition of Leeyo Means for You

By Aarthi Rayapura May 23, 2017

Some pretty big news was announced recently, in case you weren’t aware. But if you’re reading this, you’re probably super aware.

As the i’s get dotted and the t’s are crossed, people want to know, “what does this mean for us?”

There’s been a lot of discussion surrounding the acquisition announcement. Herewith, a few of the pertinent partakers of said discussion:

But, really, what’s it mean for you?

An understanding of the landscape. A response. And, a bigger, better and more powerful response to your ASC 606 needs, in a nutshell.

Consider what Forrester Research analyst Andrew Bartels told Bloomberg BNA in the recent article published in the firm’s Accounting Policy and Practice Report.

Read the Full Article Here

He noted software companies purchase other companies generally for three reasons:

  1. The technology
  2. To acquire talent and to take out a competitor
  3. To acquire the revenues from that vendor’s client base

‘‘Oracle, for example, does that a fair amount,’’ Bartels said. ‘‘IBM tends to do the first a fair amount. If you look at IBMs acquisitions, they typically are acquiring vendors who’ve got a particular product that they want to add to their portfolio.’’ As reported in Bloomberg, a large number of enterprise resource planning (ERP) vendors aren’t moving fast enough to tap into the accounting space, and (Zuora’s) Leeyo acquisition was a natural solution to a problem that needed a quick action.

‘‘There is this huge demand coming our way,’’ Leeyo chief executive officer Jagan Reddy told Bloomberg BNA. ‘‘Zuora and Leeyo started talking to each other and we figured out Zuora has tons of resources, investments they can make. Why can’t we join hands and take this market immediately,’’ he said.

‘‘Because ASC 606 is happening now, it’s not like we have two years to build this product,’’ said Tien Tzuo, Zuora founder and chief executive officer. ‘‘For the last six months we said ‘we have all these customers, they need ASC 606, they need it now’,’’ he said.

Added Reddy: ‘‘This is a very niche space—it’s a very huge space but it’s a very less known space by a lot of people. When you talk outside about revenue recognition, there’s much more complexity, not many people know it. Leeyo was the first one to come in and create this market.’’