August 27, 2008

The Unique Needs Of Subscription Based Services

The growth of the Software as a Service (SaaS) business model has created a whole industry of companies that bill customers on a subscription basis. These companies have varying degrees of complexity to their service offerings and how they manage and charge for them - whether it's by number of users, transactions, sales, etc.- and they need billing platforms that can support all of those variables. One new application that fits this bill is Z-Billing from Zuora, Inc.

We talked briefly with Tien Tzuo, CEO of Zuora.

How are the needs of subscription-based companies different than other businesses beyond recurring vs. fixed payments?

A subscription-based company needs do go beyond recurring and fixed payments. The billing system has to be easily customized to fit the changing needs of the customer. A subscription can offer many different choices that can be changed anytime, so the system has to be hassle-free to change product and pricing options on a dime.

What billing platform have most SaaS and subscription businesses been using until now? How is Z-Billing different?

Currently, most subscription business use in-house built programs. The problem with these systems is that they are costly to the business. They are costly not only because of the man-hours and maintenance, but also because of efficiency and accuracy. Z-Billing is easily integrated into companies current infrastructure. There is no need for extra programming or hassles.

What does it cost?

Z-billing costs 2 percent on invoicing and goes down from there.

Laura Leites, Assistant Editor, Smallbiztechnology.com

tags: saas , subscriptions , zuora | 0 comments