CRM- September 2008 - (Page 33) ARIA SYSTEMS From A to Z(uora) sendingt A(ria) to Z From he Bill, As software-as-a-service (SaaS) uptake continues to grow, so do the internal complexities with back-end operations. Recognizing early that on-demand service providers have different needs than their on-premises counterparts, billing-as-a-service provider Aria Systems came to the rescue of Web service providers. “[Aria] recognized…a demand for services-on-demand,” points out Jeff Kaplan, managing director of ThinkStrategies. “That demand can be variable in nature. Not only do the offerings tend to change, the usage levels could change as well,” he says. Realizing that ondemand software is a different animal, Aria founder Ed Sullivan applied knowledge gained in the gaming and telecom space prior to his 2002 Aria endeavor. One challenge that organizations face when jumping into platforms and Web services is that of scalability. Having a billing-andtracking system that can monitor and meter scaling usage is important. Kaplan says that Aria seems to understand the breadth of the challenge. The organization is older than many of the competitors popping up in recent months offering on-demand billing and invoicing services. (See our final Rising Star, Zuora, right.) Michael Coté, analyst with RedMonk, says that, out of all the subscription-as-a-service billing solutions in the market right now, he sees Aria’s as the most complete, pointing out that Aria has more experience in the industry than the others. “[Aria does] the full cycle of managing the customer, from putting up offerings and managing the invoicing to collecting everything,” he says. Coté adds that a large sector of Aria’s audience is with third-party vendors wanting to add an on-demand billing solution to platform offerings, but essentially, Aria could provide its services to any inthe-cloud company in need of a scalable payment solution. “[Aria’s service] represents the linchpin of those [SaaS] operations,” Kaplan notes. “If you can’t provision and bill your services, you can’t scale your vision.” He adds that, at this point, the billingas-a-service market is an embryonic operation with an interesting segmentation. Kaplan says he finds that a more mature SaaS company has probably built its own system, and is now considering whether it should transfer to a more robust service like Aria. Smaller startups haven’t hit the pain point yet and are using onedimensional solutions (such as PayPal). As they grow, they’ll begin to realize that those simple credit-card services don’t necessarily tie into other back-end office operations and don’t help meter and measure actual authorization of services. Kaplan says the only challenge for Aria at this point is educating the market about a relatively new kind of service. —Lauren McKay www.destinationCRM.com With all the subscription-based software-as-aservice (SaaS) on the market today, you’d think that subscriptions were an easy business model. You’d be wrong, though; in fact, according to a number of SaaS watchers, getting the billing right is one of the hardest parts of building an ondemand business, and the ones who have done so—see our other billing-as-a-service Rising Star, Aria Systems, left—guard their efforts as part of the “secret sauce” that sets them apart. Well, a new company named Zuora has bottled that sauce and is selling it. The company, founded by former executives from Salesforce.com and WebEx, provides an on-demand system for all subscriptions, billing, and account management, supporting one-time, recurring, usage, metering, and volume tier pricing increments. And analysts—typically a reserved and skeptical bunch—are in love with this company; Denis Pombriant, founder and managing principal of CRM consultancy Beagle Research Group, likes Zuora so much he’s quoted on its home page. “Keep an eye on Zuora, it has a great idea and is an emerging company on the move,” Pombriant says. Bruce Richardson, chief research officer of AMR Research, is another fan.“If you get a chance to spend 15 minutes or an hour with someone from Zuora to learn about this solution, it will be the most profitable investment of your life,” Richardson says. “[Cofounder and Chief Executive Officer] Tien Tzuo is one of the smartest guys in this industry. Now is the perfect time to launch a solution like this for the SaaS and subscriptionbased industry. This is the kind of technology ondemand companies have needed.” Officially launched in May, the company has landed $6.5 million in venture funding from Benchmark Capital and Marc Benioff (Tzuo’s old boss at Salesforce.com), and already claims 17 customers, including yet another of our Rising Stars, Marketo (see page 32). —Marshall Lager ZUORA CUSTOMER RELATIONSHIP MANAGEMENT | SEPTEMBER 2008 33 R I S I N G S TA R S sendingthe Bill, http://Salesforce.com http://www.destinationCRM.com
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