The subscription economy for financial services is tipped to skyrocket by 2018 and cloud SaaS provider Zuora says it's time to step up the game.
The company has launched a new cloud platform designed to capitalise on the growth coming from ANZ telcos, energy companies and pharmaceuticals, which will account for 40% of large enterprises transitioning to subscription-based business models by 2018.
Last month Zuora acquired revenue recognition automation provider Leeyo Software as it transitions further into a SaaS model.
“Ten years ago, we saw a tectonic business model shift - one that we now call the Subscription Economy - and Zuora built the first suite of products to automate the unique billing needs of subscription businesses,” comments Tien Tzuo, Zuora's founder and CEO.
“Today, we predict that this shift to services will have a massive impact on existing IT infrastructures. In this new digital world, companies require an entirely new order-to-cash architecture to manage massive recurring revenue complexities."
As a result, the company released a cloud platform that it says 'sets a new standard in dynamic enterprise software in a post-ERP world'.
The company cites its own Subscription Economy Index, which found that subscription-based companies' revenues grow eight times faster than that of the S&P 500. Enterprises with more than $100 million in revenue are growing 15% year over year.
Zuora believes that legacy financial enterprise systems such as ERP are not optimised for the subscription economy. The company has targeted that gap and now serves enterprises that are looking for more dynamic approaches.
“As companies undergo digital transformation, many are finding that a growth opportunity exists in shifting from a product-centric to a software- or services-centric business model approach. Doing so requires several significant changes in business model strategy to support the cultivation of customer experiences and relationships," adds Amy Konary, IDC Research Program's vice president.
The company has also attracted large customers including Symantec, Schneider Electric, Toshiba and Zendesk. The company has a local office in Sydney, Chennai and Tokyo as well as other locations worldwide.