Over 75 Business Leaders from Around the World Endorse a New Way to Build Better Businesses through Subscriptions
SAN FRANCISCO, Calif. – September 19, 2013
Zuora, the subscription commerce, billing and finance leader, today announced that over 75 business leaders joined together in a new manifesto to declare that there is a better way of building a business through subscriptions. The Subscription Manifesto was unveiled at Zuora’s annual Subscribed 2013 event in San Francisco, the only event dedicated to success in the Subscription Economy.
A Better Way to Build a Business and the $500 Billion Opportunity
There has been undeniable shift in the marketplace, as people and companies alike are subscribing more and more to services – and not buying physical products – to meet their everyday needs. Part of a larger Subscription Economy, this change in market demand, along with the benefits of a predictable revenue stream, has attracted businesses from across industries each looking for a way to build a better business. Examples include:
- Media: Media companies, like Fairfax Media, New York Times, and News UK, are reinventing themselves in today’s digital age through strategies such as broadening their geographical reach, offering cross content bundling, delivering multi-device experiences, and providing creative pricing.
- Technology: In response to market demand, software companies like HP and Adobe have been forced to embrace the pay-as-you-go subscription models set forth by Salesforce and Amazon in order to compete;
- Device Manufacturers: In a world of connected devices, companies like NCR, Lytx and BI Incorporated have shifted their business model to sell subscription services tethered to devices, enabling a more predictable, high margin recurring revenue stream.
- Retail: Shoedazzle, Dollar Shave Club and others have discovered the benefits of an ongoing subscription relationship and the delivery of a more personalized level of service based on customer insights gathered over time;
- Telecommunications: Traditional telecom and cable companies have discovered that the next phase of their growth lies in growing revenues from their subscriber base by providing flexible, over-the-top services, a move that puts them squarely in competition with companies like Netflix, Apple, and Google;
- Education: Education is going beyond the classroom and transforming everything into online services from courses to study guides to teacher assessment tools.
- Financial Services: American Express, Advent Software, Ellie Mae and Smarsh deliver a broad array of subscription-based financial services, extending their brand to build stronger client relationships and expand into additional revenue streams.
- Healthcare: As more health records are digitized, states roll out federally mandated insurance, and new medical devices improve preventive care, companies like Fitbit, CareCloud, Illumina and Voyant Health are quickly launching new services that disrupt the industry with innovative subscription business models.
According to recent studies, the market opportunity for subscription businesses is conservatively estimated at $500 billion. Leaders across industry analyst firms, top-tier companies and emerging disruptive companies believe this manifesto as a guide to business to success in the Subscription Economy. A full list of signatories can be found here. Tien Tzuo, CEO for Zuora, believes, “in five to ten years, every company will offer subscriptions. It’s good for the customer, good for the business, and good for society. There’s been a rallying cry from our customers and others in the industry for a better way to run their business and thrive in this half trillion dollar market opportunity.”
Industry Manifesto Lays Out the Path to Subscription Success
The groundbreaking Subscription Manifesto, signed by leaders of 75 companies committed to the establishment of a modern operating model, includes a set of core values and nine guiding principles for subscription businesses to adopt.
Through their collective learning and experiences, signatories of the manifesto have realized that in the Subscription Economy, traditional approaches to running a business do not ensure success. Instead, to be successful, they have come to believe that a business must focus on:
- Deeper customer relationships versus one-time transactions;
- Dynamic, value-based pricing versus fixed, cost-plus pricing;
- Efficient, consumption-based services versus shipping unit after unit;
- Predictable, forward-looking revenue versus backwards-looking financial reporting.
Until now, business leaders in the Subscription Economy have been charting their own course. The documented principles in this manifesto will serve as a guide to all leaders that are embracing the subscription model.
The underlining principles of the manifesto can be found here.
- “There is a better way to build a business today through subscription models that enable companies to offer customers that choice that they demand, bring more predictability into the business and generate additional, recurring revenue streams for the business,” said Tien Tzuo, CEO of Zuora. “Today we stand on the shoulders of giants in a global movement that supports this industry-wide transformation.”
- “As businesses of all sizes move to the cloud, subscriptions are fast supplanting traditional licensing as the enterprise software business model of the future,” says Aaron Levie, CEO of Box. “This shift benefits vendors, who gain more elasticity and tighter alignment with customers. More importantly, the move to a subscription model frees customers from vendor lock-in, bringing more choice and innovation to the enterprise software landscape.”
- “Like most in the media industry, we are undergoing massive transformation. Subscribers are a big focus for us as we rebalance our revenues,” said Andrew Lam-Po-Tang, CIO and CTO at Fairfax Media. “This manifesto provide a very useful template for driving subscription success.”
- “Businesses with recurring revenue models across the globe are looking to better align their product and service offerings with the demands of their customers,” said Ben Kepes, Analyst and Principal at Diversity Limited. “Zuora has always been, and continues to be a visionary leading and educating companies about where the Subscription Economy is going. The Subscription Manifesto places a stake in the ground and sets the bar by which everyone in the industry will be measured.”
- “As someone who has run operations in both the subscription and traditional models, I know how challenging it is in a subscription business,” said Bill Plummer, Business Enablement Officer at NCR Corporation. “I think a guide to help businesses based on real experience is a beneficial step for the growth of the Subscription Economy. I support this manifesto and call on other leaders to do the same.”
- “The shift towards subscription business models is driving companies to build better ways to run their businesses. In this new world how you price, sell, bill, collect payments and account for your business is entirely different,” said Amy Konary, Research Vice President at IDC. “The community of businesses, analysts, and partners in the Subscription Economy have come together with Zuora to structure this framework of guiding principles to help every business become a successful subscription business.”
- “We decided a few years ago that we needed a new model to drive our business,” said Charles Best, CFO of Blackline Systems. “In addition to moving to a SaaS-based revenue model, we also implemented a number of subscription-based Cloud technology tools internally to improve operating efficiencies. BlackLine’s success today is due in large part to this shift to the ‘Subscription Economy’. Businesses looking to thrive will do best by embracing the principles of this manifesto.”
- “The subscription model is powerful and totally different from a traditional business model and I support the manifesto because it covers all the bases and is built on real experience,” said Andrew Pimentel, Head of Operations at Demandforce. “Every business in the Subscription Economy should embrace these principles if they want to be successful.”
About Zuora, Inc.
Zuora is the global leader in subscription commerce and billing, helping companies in every industry transition to the Subscription Economy. Enterprise leaders and high-growth companies alike use Zuora’s multi-tenant cloud platform to launch, scale, and monetize their subscription services. Zuora’s applications work where traditional ERP applications fail: Subscription pricing, quoting, orders, billing, payments, and renewals. Built from the ground up by SaaS industry veterans from salesforce.com, PayPal, and Netsuite, Zuora services innovative customers like Informatica, Tata Communications, Box.net, DocuSign, GigaOM, Xplornet, Ustream and Reed Business Information. To learn more about Zuora, please visit zuorainternprd.wpengine.com