The world is moving from a product based economy to a service based economy. Some companies born in the subscription model, but others need to transform from their existing model to the subscription based model.
So, well everybody knows already that Zuora is an emerging competitor in the market, creating and end to end solution for subscription models. Take care, they do not only take care of the billing activities (there are thousand of companies dedicated to managing billing activities), they do more.
- Allows any business in any industry to launch or shift products to subscription.
- Implement new pay-as-you-go pricing and packaging models.
- Ways to play:
- Packages model,
- Promotional strategies,
- Pay as you go,
- Overall strategy,
- Bundling strategy,
- Segmentation strategy.
- Gain new insights into subscriber behavior.
- Open new revenue streams.
- And disrupt market segments to gain competitive advantage.
- 100% integrated with SalesForce.
I find specially interest on the documentation shared in the Zuora academy, where aspects as the financial metrics for a subscription company are defined, measured and analyzed. I read the Metrics white paper and it’s a worthy read.
The main concepts are:
- Churn rate: % of lost business, 10% churn is a healthy percentage. Small changes in your company’s churn rate can have a dramatic impact on growth over time.
- Recurring Profit Margins: the difference between your recurring revenues and your recurring costs.
- Cost of Goods Sold (COGS).
- General & Administrative (G&A).
- Research and Development (R&D)
- Growth Efficiency Index: How much new recurring revenue can you get out of a given investment in sales and marketing? If you spend $1 on sales and marketing, how many new recurring revenue dollars does that buy you?A healthy ratio for a b2b SaaS company with a direct sales force is 1:1. Invest $1 to book $1 in new recurring revenues.
To follow the competition:
- Strong competitors: AMDocs, CGI Group, Oracle, CSC,
- Prominent competitors: Aria Systems, Chargify, AWS, SAP
Things to be improved:
- VAT management,
- Revenue recognition,
- Multi-currency support outside of SalesForce,
- Integration with other vendors: Microsoft Dynamics and Oracle.
I found this picture in this web, and I personally find it very funny.
Things as “this bottle of milk can contain milk” makes me laugh about how stupid human race can be.
Legal department will tell you that these type of sentences are here to protect us of potential sues. This culturally comes from USA, but in Europe the labeling of the products started to contain this type of protective sentences: the sentence above was read by me from a tetra-brik of milk.
When you look for a Web hosting you will see there are so many features that are clear, for instance:
- We offer unlimited memory size.
- We offer unlimited band width
But rarely they will mention the CPU assigned to your virtual and shared environment and the way the CPU is assigned to it.
Ask for it!!
Divestiture, Merge, acquisition… words that are added to some of the activities that a customer comment to you. You receive it as a business as usual, but you have to know that you probably are one of the guys that only have listened about it.
When this happens, the first thing that has to go to your mind is: be quiet.
The second thing is ask to the person that is commenting you the deal about how secret is the deal, about who you can talk to about it, and what is the communications plan to the managers, employees…
The third thing to do is to make calls and write e-mails. Make questions, retrieve information and always forget to explain why you are required to have that information. For sure, calls are better than e-mail.
The fourth thing is to try to limit the #people that knows the deal and it should be closed to zero.
Well, I am not discovering the wheel and I’m not inventing anything new, but these simple rules when they are broken, make the life of the people broking it impossible.
In the industry I work there are Non disclosure agreement, and if you fall in this trap, then you are out of the game.
One milestone that should be always be defined in a project from the control point of view is that Project Manager will notify the Client when the spend against budget reaches 80%. Doing an analysis about reasons that can make the project to be over budget at the end of the project.
One formal STOP for the project manager where s/he also have a milestone to see how things really go.
Sometimes the project manager is so busy in the weekly waves and have the hope that the time spent in the previous weeks is going to be recuperated.
I have worked in a project with this problem and one of the things makes me to detect the that the project was not going into the right direction was the ETC forecast was not always done in the right way, there were estimations that were clearly unrealistic.
Live is not perfect and there are so much projects that does not finish as you desire. This was one case more
Master Service Agreements (MSA) are signed in a global account around the world and part of the moon.
Nevertheless it’s necessary to have the Local Service Agreement (LSA) in order to detail how we are going to work from this area or country. Let’s define this overall framework with more details.
No LSA = no contracts = no work.
It’s something that is essentially presented as a “service”: platform as service, solution as service, wine as service….
But it also should have some technical features that makes you able to identify as “cloud”.
- It’s offered in an independent platform.
- There is proven security in terms of data and is privacy compliant (this is the main question of the clients).
- There is the possibility to synchronize the cloud data with the local data.
- It’s available off-line.
- It’s mobile, you has to be able to access to it from anywhere.
If the service does not provide some of these features, the type of contract is “something as a service” but it’s supposed it’s not cloud
From my point of view, that I’m not involved in the complex processes of building neither of these products; I’m just considering some of these solutions for my client. That means for me that almost all the time, I’m reviewing contract details about how these services covers SLAs, availability, how they guarantee security, what are the penalties in case of unavailability, what is the minimum time we need to contract the services, how are the implementation processes and how is the service support organized,…. prices.
So for me the cloud is essentially another way to contract IT services, paying just a fee.
which came first, the chicken (server) or the egg (terminal)?
Using the chicken or the egg dilemma, I have a funny story, we are installing a new terminal server running on Windows 2008 and need to activate the Client Access License (CAL).
The issue is we don’t have any Windows 2008 server so there’s no way to activate the terminal server licenses.
So in this case, chicken is first,
It came to my attention the way that these CAL works. I come from applications world so this is something I need always to learn about.