Zuora analytics acquisition promises deeper insights for ‘subscription economy’

May 26, 2015, 12:00 PM UTC
Photograph by Misha Vladimirskiy — Butchershop Creative

Here’s a rhetorical question: What’s the difference between a repeat customer and a subscriber? For a growing number of companies investing in digital commerce, the answer is “not much.”

Those are the organizations that well-backed startup Zuora is trying to reach with a forthcoming new business intelligence service that builds on its existing relationship management system, Z-Business.

The new offering, called Z-Insights, combines information from Zuora’s subscriber invoicing and billing platform with customer usage information surfaced with analytics technology from Frontleaf, which Zuora officially acquired in mid-May. Terms of the deal weren’t disclosed.

The idea is to give companies tools that help them get deeper with subscribers, helping sales teams go beyond simply scheduling sales calls when an existing contract is up for renewal. Z-Insights will assess which relationships are most important, which offer the potential for add-on sales, and which are at risk. It could also be used to develop new pricing models.

The new offering, to be rolled out slowly starting in fall 2015, could help Zuora extend beyond its initial stronghold among high-profile companies that sell software as a service (SaaS)—the likes of Box, DocuSign, Marketo and Zendesk—into businesses building services portfolios that are tied to the Internet of things such as Honeywell and Schneider Electric.

“Z-Business is powering the best subscription businesses in the world, but in order to building compelling subscription experiences, our customers have told us they need better tools for gaining subscriber insights,” said Zuora founder and CEO Tien Tzuo, in a statement.

Constellation Research principal analyst Ray Wang noted:

“In the era of digital disruption, the companies that are winning have shifted from selling products to delivering experiences and outcomes that are authentic to their brands. Businesses must operate with a digital DNA and an intention-driven mindset to collect meaningful insights that help predict and deliver on subscriber needs.”

As of early March, Zuora’s system was being used to handle more than $42 billion in invoices. At the time, the company disclosed a $115 million late-stage investment led by Wellington Capital, Blackrock, and Passport Capital. That brings Zuora’s total backing to around $250 million.

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