Zuora Adds Unified Monetization Capabilities to Allow Its Customers toMonetize Both Subscriptions and Products
September 24, 2021
By: Mark Thomason

IDC's Quick Take
One of the big challenges of monetizing subscriptions is selling an array of products that go along withsubscriptions, such as GoPro selling cameras with video editing subscriptions. This typically requires twomonetization streams (subscription management and transactional systems) with the goal of combining
both subscriptions and products on one invoice for a great customer experience. Zuora can now
monetize both streams eloquently, starting from configure, price, quote (CPQ), working with supply
chain systems for inventory and shipping, creating a unified invoice, applying the right amount ofrevenue recognition, and ending with analytics that help the business understand the big picture ofcustomer purchases.

Product Announcement Highlights

On September 16, 2021, Zuora announced Unified Monetization, which contains several productannouncements and a multitiered agreement with Microsoft, during its "Journey to Usership" customer
conference.
The unified monetization announcement adds a significant capability to Zuora's platform: the ability tomonetize widgets/products sold along with subscriptions separately. This is significant because of thetrend for companies to offer hardware products that complement their subscriptions, such as GoPro
selling cameras and accessories in conjunction with a subscription to its cloud video storage and editing
offering. Previously, Zuora could only monetize a subscription with limited one-time charges as part ofthe subscription (e.g., implementation services).
To support unified monetization, Zuora upgraded several components to ensure an integrated
experience, including its configure, price, quote (CPQ) application to enable easy creation of bundles ofproducts and subscriptions, invoice designer, and revenue recognition to ensure the company stays ASC
606 compliant no matter how complex the order gets. Zuora also upgraded its workflow tool andsimplified its SDK to support the process as a headless application.
The Microsoft agreement includes expanding the deployment of Zuora's components to the Microsoft
Azure infrastructure, deep integration with the Microsoft Dynamics 365 Finance suite, and embedding
Microsoft Power BI reports into Zuora applications.

IDC's Point of View
The adoption of the subscription business model has only picked up speed as companies have seen thesuccess of the model. In the software industry, the subscription business model now accounts for 64% of
total software revenue in 2021 and is forecast to grow at 17.9% over the next five years. As part of thistrend, IDC is seeing more traditional companies become software companies by offering new digital
services that complement their existing physical products.
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When companies embark upon these combination subscription/product offerings, they ideally need tobe very agile in their bundle creation and have excellent performance feedback so they can understandcustomer behavior and adoption so they can succeed on delivering what their customers want at theright price. Zuora's unified monetization enables this agility and allows its customers to rapidly bringcomplex offers to market while enabling salespeople to sell them correctly using its updated CPQsolution. This makes new hardware-as-a-service models much easier to deploy.

Subscriptions Covered:
Digital Business Models and Monetization
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