Through its partnership with Salesforce, Zuora's subscription billing and commerce services will run on Force.com, Salesforce's enterprise cloud computing platform. The combination lets Barrett customize pricing to certain customer segments or change price plans, bundles or promotions on the fly and receive analytics on how the plans are working out.
Zuora has a lot of big-name, legacy competitors, including Oracle Corp. (Nasdaq: ORCL) and Amdocs Ltd. (NYSE: DOX), but what sets it apart is its reliance on the cloud, which lets operators get up and running in a matter of months, a lot faster than when legacy infrastructure is involved.(See Cloud Telephony Is More Than Hot Air.)
Zuora CEO Tien Tzuo says there's also significant cost savings in using the cloud in this new "subscription economy" where access is more important than ownership.
"The problem with Amdocs is it's so expensive and labor intensive that the cost and time becomes prohibitive," Tzuo says. "If you're doing a new product launch and it takes two years and a $1 billion, then maybe Amdocs makes sense. But once you're launched and your competitor does something different in one of your markets and you need to respond, and it takes you six months, it will be impossible to compete."
Why this matters
Zuora for Communications works on any network -- broadband, cellular, Wi-Fi and VoIP included -- but it gets more interesting with Long Term Evolution (LTE). Most, if not all, wireless operators have stated that they cannot maintain unlimited pricing on 4G networks and that new business models will be explored. Increasingly, they are looking to the cloud to quickly introduce new tiers of pricing or manage caps. The ability to change plans and promos on the fly may be an important consideration too as operators test the waters.
Barrett Xplore is an interesting customer for Zuora because it is in the early stages of rolling out a WiMax network, but plans to later move to LTE through software upgrades to its network. Its pricing may change as a result, and -- as a greenfield deployment -- using the cloud makes sense from a cost and time-to-market perspective. (See Xplornet Plots Canadian 4G Network With Tellabs.)
Billing is going to be a bigger issue on LTE networks than it is on 3G. Read up on how wireless operators have changed their pricing strategies in the following stories.
- Mobile Ops Make Policy More Popular, Less Punitive
- CTIA 2011: Throttling & the Data Cap Debate
- Sprint CEO Taunts Competitors Over Unlimited
- Sprint Raises 3G Prices to 4G Levels
- AT&T Intros Mobile Data Caps
- MetroPCS Continues 4G Price War
- Capping the Data Gusher
— Sarah Reedy, Senior Reporter, Light Reading Mobile