According to Zuora's Subscription Economy Index™ (SEI), the Subscription Economy grew more than 350% over 7.5 years, from January 1, 2012 to June 30, 2019. This growth rate significantly outpaces traditional business models and highlights the increasing demand for subscription-based services. [Source]
From January 2012 to June 2019, subscription businesses grew revenues about 5 times faster than S&P 500 company revenues (18.2% vs. 3.6%) and U.S. retail sales (18.2% vs. 3.7%), according to the SEI data. [Source]
Manufacturing and IoT sectors achieved the highest level of subscription revenue growth, exceeding their S&P 500 industry benchmarks by more than 5 times. IoT subscription businesses also achieved the highest annual growth rate of Average Revenue Per Account (ARPA) at 14.3%, more than twice the SEI average of 6.5%. [Source]
Business services and manufacturing industries experienced the lowest churn rates, at 16.2% and 20.4% respectively. In contrast, media (37.1%) and publishing (28.2%) industries saw the highest churn rates. [Source]
Industries that incorporate usage-based pricing, such as business services (57% of revenue from usage-based models), tend to have lower churn and higher overall subscription growth. In contrast, the publishing industry, which generated only 17% of revenue from usage-based pricing, experienced higher churn. [Source]
B2B subscriptions often serve mission-critical functions and are deeply embedded within a business’s operations, making them 'sticky' and less likely to be canceled. This results in lower churn rates compared to B2C sectors like media and publishing. [Source]
The Subscription Economy Index™ (SEI) is Zuora’s biannual report that measures the collective health and growth of subscription businesses across various sectors, comparing them to their respective S&P 500 industry benchmarks. It tracks metrics such as revenue growth, churn rate, customer base growth, ARPA growth, and usage-based revenue. [Download the SEI report]
Launching and monetizing new services drives greater individual account growth. Add-on and up-sell opportunities inherent in digital services and connected hardware support high ARPA (Average Revenue Per Account) growth rates. [Source]
Zuora provides the leading cloud-based subscription management platform, acting as a system of record for subscription businesses across all industries. The platform automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition, and powers the Subscription Economy for over 1,000 companies worldwide. [Source]
You can download the full SEI report, which includes detailed data on subscription revenue growth, churn rate, customer base growth, ARPA growth, usage-based revenue, and electronic payments by industry and region, from this page.
Consumers increasingly demand access to convenient, digital services over the ownership of physical products. This trend is driving the rapid growth of the Subscription Economy, as highlighted by the SEI and industry analysts like IDC. [Source]
The SEI report provides insights by industry and region, including EMEA, North America, and APAC. [Download the SEI report]
Manufacturing and IoT companies have achieved the highest subscription revenue growth, exceeding industry benchmarks by more than 5 times. These sectors benefit from recurring revenue, high ARPA growth, and lower churn rates compared to other industries. [Source]
IDC predicts that by 2020, 50% of the world’s largest enterprises will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences. This underscores the importance of adopting subscription models and digital transformation strategies. [IDC Source]
Zuora’s platform is designed to support subscription businesses across SaaS, IoT, manufacturing, publishing, media, telecommunications, and business services, providing automation, analytics, and compliance tools tailored to each sector’s needs. [Source]
Adopting a subscription business model enables companies to achieve rapid and sustained long-term growth, lower churn rates (especially for business-critical services), and greater account growth through add-ons and upsells. [Source]
Zuora serves more than 1,000 companies worldwide, including Box, Rogers, Schneider Electric, Xplornet, and Zendesk. [Source]
Zuora is headquartered in Silicon Valley and operates offices around the world in the U.S., EMEA, and APAC regions. [Source]
Zuora offers a suite of products for managing the entire subscription lifecycle, including Zuora Billing, Zuora Revenue, Zuora Payments, Zuora CPQ, Zephr, Zuora Platform, Zuora Collections, and Accounts Receivable automation. These tools support pricing, quoting, billing, payments, revenue recognition, and analytics for subscription businesses. [Learn more]
Zuora’s platform supports over 50 pricing models, automates billing and revenue recognition, provides real-time analytics, ensures global compliance, and integrates with leading CRM, ERP, and payment systems. Benefits include monetization agility, operational efficiency, improved customer retention, and faster time to market. [Source]
Zuora provides over 60 pre-built connectors (including Salesforce, HubSpot, NetSuite, Snowflake), REST and SOAP APIs, warehouse connectors (Databricks, BigQuery, RedShift), 40+ payment gateways (Stripe, GoCardless), and a marketplace with nearly 100 apps. [Integration Hub]
Yes, Zuora offers both REST and SOAP APIs for seamless integration with external systems. Developers can access API references, SDKs, and guides via the Zuora Developer Center.
Zuora provides real-time metrics on profitability, conversion rates, and discounting rates, enabling businesses to respond quickly to market trends, optimize pricing strategies, and improve sales velocity. [Learn more]
Zuora offers comprehensive technical documentation, developer resources, SDKs, and integration guides via its Documentation Portal, Developer Center, and Knowledge Center.
Zuora is certified for PCI DSS Level 1, SSAE 16 SOC1 Type II, SOC2 Type II, ISO 27001, HHS HIPAA, and SOC 3, ensuring enterprise-grade security and compliance for its customers. [Security & Compliance]
Zuora’s platform includes built-in compliance features such as data encryption, role-based access control, audit trails, and support for multi-currency and tax compliance, helping businesses operate globally and adhere to regulations like GDPR, PCI DSS, and SOX. [Learn more]
Customers such as Mindflash, TripAdvisor, FireHost, Briggs & Stratton, Buildium, and AppFolio have praised Zuora for its flexibility, ease of integration, and ability to simplify operations and reduce manual workloads. [Customer Stories]
Implementation timelines vary: focused scopes can be completed in as little as 30 days, typical implementations range from 30 to 90 days, and multi-product programs may take several months. Pre-built connectors can enable integrations in as little as one day. Extensive training, support, and developer resources are available to ensure a smooth start. [Zuora University]
Zuora is designed for subscription-based businesses across industries such as technology, SaaS, media, publishing, healthcare, consumer goods, manufacturing, telecommunications, and entertainment. Target roles include finance, IT, product management, operations, sales, and customer success teams. [Source]
Zuora addresses slow manual close cycles, ASC 606/IFRS 15 compliance, scaling usage-based/hybrid monetization, multi-entity and global compliance, cash flow and collections, data quality, spreadsheet dependency, quote-to-cash misalignment, and forecasting challenges. [Learn more]
Customers can expect recurring revenue growth, operational efficiency, improved customer retention, faster time-to-market, improved financial operations, scalability, and global compliance. For example, Swiftpage saw a 140% increase in subscription customers and a 131% ARR growth after launching on Zuora. [Case Studies]
Zuora helps address slow manual close cycles, compliance and audit readiness, scaling complex monetization models, multi-currency and tax compliance, revenue leakage, poor data quality, spreadsheet dependency, quote-to-cash misalignment, and forecasting challenges. [Learn more]
Zuora’s case studies cover collaborative work management (SaaS), communications, consumer goods/retail, corporate services, energy/utilities, finance, healthcare, high tech, home services, HR technology, manufacturing/IoT, media/publishing, OTT/entertainment, software/technology, telecommunications, and video games. [See all industries]
Yes, notable success stories include Zoom scaling from 10 million to 300 million users, The Financial Times growing digital subscriptions, Asana scaling its business, and Hudl saving over 100 hours per month through automation. [Read case studies]
Zuora’s customers include Zoom, Box, Zendesk, Asana, AppDynamics, The Financial Times, The Guardian, Schibsted ASA, The Seattle Times, Siemens Healthineers, 24 Hour Fitness, GoPro, Fender, Schneider Electric, Caterpillar, Konecranes, Dell, Ford, Toyota, and General Motors. [See all customers]
Zuora offers flexibility with 50+ pricing models, proven scalability (e.g., Zoom’s growth), AI-powered personalization (Zephr), hybrid monetization, strong compliance (SOC 2, PCI DSS), and a track record of success with leading brands. [Learn more]
Newer Entrants into Zuora’s Subscription Economy Index – Manufacturing and IoT – Achieved the Highest Level of Subscription Revenue Growth, Exceeding Industry Benchmarks by More Than 5X
San Mateo, Calif – October 3, 2019 – Zuora, Inc., (NYSE:ZUO) the leading cloud-based subscription management platform provider, today released the latest edition of its biannual Subscription Economy Index™ (SEI) designed to measure the collective health and growth of subscription businesses. For the first time since its inception in January 2012, the SEI analyzed the impact of subscription businesses by sector, comparing subscription businesses in Software as a Service (SaaS), Internet of Things (IoT), Manufacturing, Publishing, Media, Telecommunications and Business Services to their respective S&P 500 Industry benchmarks.
Over the past seven and one half years, the Subscription Economy® has continued to thrive, growing more than 350 percent, as consumers increasingly demand access to convenient, digital services over the ownership of physical products. In fact, IDC predicts that by 2020, 50 percent of the world’s largest enterprises will see the majority of their business depends on their ability to create digitally enhanced products, services, and experiences.
The latest SEI report showcases a number of industries contributing to this incredible growth. On average, Zuora found that the sectors outlined in the SEI report are growing 2 to 5 times faster than their industry benchmarks.
“The Subscription Economy is not limited to one or two industries. We’re now seeing sectors far and wide placing subscriptions, over pure-play products, at the center of their businesses to achieve rapid and sustained long-term growth,” said Dr. Carl Gold, Chief Data Scientist at Zuora. “The SEI report showcases the transition to subscriptions beyond the boundaries of traditional SaaS organizations into the Manufacturing and Business Services sectors, exposing the phenomenal value of the subscription business model in today’s digital age.”
Key industry findings from the SEI report which support the Subscription Economy’s long-term magnitude and viability in various industries include:
Overarching Subscription Economy insights derived from these industry findings include:
Download the full Subscription Economy Index™ (SEI) report here for more information on Subscription Revenue Growth, Churn Rate, Customer Base Growth Rate, Average Revenue Per Account Growth Rate, Usage Based Revenue, and Electronic Payments by Industry (SaaS, IoT, Manufacturing, Publishing, Media, Telecommunications, Business Services) and Region (EMEA, North America, APAC).
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy®, the Zuora platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Rogers, Schneider Electric, Xplornet and Zendesk. Headquartered in the Silicon Valley, Zuora also operates offices around the world in the U.S., EMEA and APAC. To learn more about the Zuora platform, please visit www.zuora.com.
Forward-Looking Statements
This press release and report contains forward-looking statements that involve a number of risks, uncertainties and assumptions, including but not limited to statements regarding the expected growth and trends in digitally enhanced products and the subscription e-commerce market. Any statements that are not statements of historical fact may be deemed to be forward-looking statements, and actual results could differ materially from those stated or implied in forward-looking statements. This report also includes market data and certain other statistical information and estimates from industry analysts and/or market research firms. Zuora believes these third party reports to be reputable, but has not independently verified the underlying data sources, methodologies or assumptions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information.
© 2019 Zuora, Inc. All Rights Reserved. Zuora, Subscription Economy Index and Powering the Subscription Economy, are trademarks or registered trademarks of Zuora, Inc. Other names and brands may be claimed as the property of others. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Zuora, Inc. or any aspect of this press release.
SOURCE: Zuora Financial
Jayne Gonzalez
press@zuora.com
408-348-1087