Zuora asserts that the world is moving from products to subscription services. Furthermore, it asserts that its subscription billing and payment solutions, called Z-Commerce Platform, will lead the way. While the approach Zuora suggests appears workable, I'm not at all sure that its assertions are correct or are likely to become correct in the immediate future.
Here's what Zuora has to say about Z-Commerce
Is 2009 the year that developers move into the Cloud? Are you a Java, Ruby, Force.com, or Facebook developer building an application in the Cloud? Have you leveraged technical cloud services from Amazon Web Services, Google AppEngine, or salesforce.com's Force.com platform? Have you built an application on Facebook? Now that you're developing in the Cloud you're starting to wonder — how will you get paid in the cloud?
Monetizing and operationalizing a cloud service shouldn't be so hard. If you're developing in the Cloud, why build and install your own billing infrastructure? If you’re building a Facebook application, why limit yourself to just advertising revenue? Just as you can get storage from Amazon as a service, or run an application engine from Google as a service, why not get access to billing as a service through a bunch of web service calls?
Introducing the Z-Commerce Platform: the first open platform that makes it easy for developers to monetize Cloud Computing services. The Z-Commerce Platform provides a full commerce-as-a-service solution that lets developers plug in billing, payment, and subscription management services with just a few lines of code — and start getting paid.
Snapshot analysisWe've heard the statement that the market will move away from products to services. I remember hearing this during the hype that surrounded application service providers, utility computing and, how could I forget, software as a service. In each case, some organizations found that purchasing access to needed applications fit their budget, their requirements for security and their need to comply with regulations. It is also clearly true that only a segment of the market moved in that direction.
I, for one, have used managed and hosted services as the backbone of the Kusnetzky Group's IT infrastructure. The 451 Group/Tier1 Research also uses software as a service for several IT functions. That being said, this approach is being used only for ancillary functions and not the core business functions for those organizations. It is not at all clear that organizations, as a whole, are going to be willing to assign very critical, live-or-die functions to this approach. As the economic squeeze is increasingly felt, however, the rules could change.
Zuora appears to believe that it's technology is just what's needed to get everyone else on board. While I won't argue that the technology they're offering appears workable, it also requires that either the application already be built in such a way as to make the insertion of Zuora's technology into the flow of control possible or that the organization be willing to re-write their code to use Zuora's Z-Commerce Solution. This is in violation of several of the golden rules of IT (see the post Reprise of the Golden Rules of IT for more information about the golden rules.) As Rule #1 says, "if it is not broken, don't fix it."
There are those in a position to re-engineer their product delivery platform. If your organization is in that position, examining Zuora's Z-Commerce portfolio would be worth the time.