July 8, 2010
News yesterday that NetSuite and Zuora “announced a partnership to jointly develop and offer combined solutions to companies that need to meter, price and bill for subscription- and usage-based products.” Particularly interesting given that only six months ago it was NetSuite and Aria Systems announcing a similar deal (disclosure – see relevant information about relationships with all three vendors)
According to the release, Zuora is a “preferred partner of NetSuite for subscription- and usage-based businesses.” As a first deliverable of the partnership, the companies plan to integrate Zuora’s Z-Commerce Platform with NetSuite’s cloud-based billing engine. The solution, as one would expect, will support any subscription pricing model including one-time, recurring, usage and metering charges, and volume tier pricing, and enables companies to tailor products and pricing to specific market segments.
Specific functionality will give NetSuite customers:
- Ability to rapidly deploy metered, pay-as-you-go, and subscription revenue streams
- Flexibility to quickly modify pricing and packaging in response to market shifts
- Easy-to-use subscription management and full lifecycle management capabilities
- Automated process integration with Z-Commerce billing and NetSuite ERP/Financials.
Given the traditional message of Zuora founder Tien Tzuo, it’s not surprising that the NetSuite release talks strongly about the “growing shift to the subscription economy.” But hand-waving aside, I spend a lot of time talking to SaaS vendors and am all to aware of some of the issues that not having subscription and billing sorted bring up. There’s still a lot of people running billing from a spreadsheet and having to do significant amounts of manual work to keep it all humming – fine when you’re small but a significant barrier to growth.
Interested in the story behind the story, I reached out to all concerned to see what this move means for the previously announced premier partnership between NetSuite and Aria Systems. Interestingly enough, and in keeping with his “talking it up” approach Tzuo said that:
I think leaders partner with leaders
I spoke with NetSuite who clarified the partnership to say that both Zuora and Aria are premier partners for NetSuite, which means that sales people can give equal attention to both products, or conversely chose the particular product that best fits the needs of their customer.
It’s clearly not awesome news for Aria, formerly the sole subscription and billing partner with NetSuite, Lance Walter from Aria came back to me with a pretty extensive and, less than happy, commentary on the situation. I agreed not to publish much of what Walter said, however he was prepared to go on the record saying that:
We’ve had great success 6 months into our partnership with NetSuite, closing six-figure deals together and delivering our next phase of product integration later this month. NetSuite’s obviously a major player in the SaaS space, and we’ve got traction together, so it’s no surprise that Zuora wants to try to get a piece of that opportunity. Zuora always uses executive connections effectively for PR splashes, but there’s no “there there” from a product or field engagement perspective according to the contacts with whom we’ve spoken.
Clearly Zuora and Aria are fierce competitors with not much love lost between them, for NetSuite partnering with both gives them the opportunity to offer customers greater choice