Zuora for Consumption Expands with a Native Mediation Engine to Accelerate Growth through Consumption Pricing

Rhea-AI Summary

Zuora expands Zuora for Consumption with a native Mediation Engine, providing new capabilities for consumption-based models.

Positive

• Nearly half of companies implemented consumption-based pricing in the last three years, and hybrid consumption models increased almost 3X between 2020 and 2022.

Negative

• None.

New capabilities provide agility and insights to power consumption-based models

REDWOOD CITY, Calif. & LONDON--(BUSINESS WIRE)-- Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern businesses, today at Subscribed Connect London expanded Zuora® for Consumption with a native Mediation Engine. Zuora for Consumption provides a holistic solution to scale consumption-based offerings, helping companies price on different models, meter raw usage events across devices and services, inform customers of consumption in near real-time and is purpose-built to recognize revenue for consumption.

New technology and fierce competition are compelling businesses to monetize their products in new ways, with a significant shift toward consumption-based models. According to new research from Zuora’s Subscribed Institute and Boston Consulting Group (BCG), nearly half (46%) of companies analyzed implemented some form of consumption-based pricing in the last three years, and hybrid consumption models, businesses that drive both recurring and usage revenue, increased almost 3X (from 9% to 26%) between 2020 and 2022.¹ New technology, including the explosion of artificial intelligence (AI) and the Internet of Things (IoT) is also expected to drive adoption of consumption-based models.

However, identifying the right consumption-based model often takes iteration. It’s important for companies to be able to adapt as customers' needs and economic conditions change to create ongoing value and predictability. While tracking consumption produces a wealth of data on how a product is used, translating this unpredictable raw usage into the right pricing model can be challenging and complex. With Zuora’s Mediation Engine, companies can now create flexible meters and consolidate usage data, unlocking new customer insights to rapidly experiment with pricing and better align with customer value.

“Modern businesses are driving recurring growth through a deep understanding of how subscribers consume their products,” said Kyle Kolich, Vice President, Product Management, Billing at Zuora. “Zuora’s new native Mediation Engine helps make this possible, integrating metering capabilities and pricing recommendations that improve consumption visibility, accelerate growth and even identify future opportunities to monetize.”

Part of Zuora for Consumption, the new Mediation Engine includes:

• Ability to ingest raw usage data at 200k events per second²
• Out-of-the-box metering components to aggregate, enrich and transform event data through a drag-and-drop user interface (UI)
• Ability to apply custom, proprietary logic to meters
• Auditable usage recording tracking throughout rating, billing and revenue recognition

To learn more about Zuora for Consumption, please visit here.

Customer & Analyst Quotes

“Constantly evolving industry trends mean we are always thinking about our pricing, how we present offers, and the data points we want to collect and make decisions on. More than 90% of leading companies in 12 industrial sectors rely on AVEVA’s software solutions to help them design, build, operate, and optimize their plants and facilities. Adding Zuora for Consumption within our AVEVA CONNECT platform will give our customers critical visibility into their consumption habits, allowing us to provide transparency and deliver value as we iterate over time,” said Kevin Cornwall, CIO at AVEVA. “Zuora’s unique, end-to-end solution also helps us simplify the complex revenue recognition and compliance involved in consumption monetization.”

“Recent IDC research found that while 42% of companies already have a consumption billing solution, it is inadequate for their future needs,” said Mark Thomason, Research Director for Digital Business Models and Monetization at IDC. “The new Mediation Engine in Zuora for Consumption enables customers to easily import, clean, and transform high-volume, raw consumption data so that consumption can be flexibly rated for any type of pricing scheme with a drag and drop interface.”

“With its new Mediation Engine and the ability to monetize consumption, subscription and one-time transactions together, Zuora is providing the revenue platform of tomorrow and powering businesses with complex consumption-based models,” said Stephen Hurrell, Vice President and Research Director in the Office of Revenue at Ventana Research.

About Zuora, Inc.

Zuora provides a leading monetization suite for modern businesses across all industries, enabling companies to unlock and grow customer-centric business models. Zuora serves as an intelligent hub that monetizes and orchestrates the complete quote to cash and revenue recognition process at scale. Through its industry leading technology and expertise, Zuora helps more than 1,000 companies around the world, including BMC Software, Box, Caterpillar, General Motors, Penske Media Corporation, Schneider Electric, Siemens and Zoom nurture and monetize direct, digital customer relationships. Headquartered in Silicon Valley, Zuora operates offices around the world in the Americas, EMEA and APAC. To learn more about the Zuora monetization suite, please visit www.zuora.com.

© 2023 Zuora, Inc. All Rights Reserved. Zuora, Subscribed, Subscription Economy, Powering the Subscription Economy, Subscription Economy Index, Zephr, and Subscription Experience Platform are trademarks or registered trademarks of Zuora, Inc. Third party trademarks mentioned above are owned by their respective companies. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Zuora, Inc. or any aspect of this press release.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks, uncertainties and assumptions, including but not limited to statements regarding the expected benefits and releases of Zuora Mediation Engine. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. Actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in the “Risk Factors” section of Zuora’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on June 1, 2023, as well as other documents that Zuora may file from time to time with the SEC. The forward-looking statements in this press release are based on current expectations as of the date of this press release and Zuora undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release also includes market data and certain other statistical information. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information.

SOURCE: Zuora Financial

¹ “Demystifying consumption-based pricing: How consumption models contribute to business success,” BCG and Zuora, October 2023
² Based on Zuora internal testing

View source version on businesswire.com: https://www.businesswire.com/news/home/20231017081726/en/

Margaret Pack

press@zuora.com

619-609-3919

Source: Zuora, Inc.

FAQ

What is Zuora for Consumption?

Zuora for Consumption is a monetization suite for modern businesses that helps companies scale consumption-based offerings.

What is the significance of consumption-based pricing?

Consumption-based pricing has seen a significant increase in adoption, with nearly half of companies implementing it in the last three years.

How has the adoption of consumption-based models changed?

Hybrid consumption models, which drive both recurring and usage revenue, have increased almost 3X between 2020 and 2022.

What is the role of Zuora's Mediation Engine?

Zuora's Mediation Engine allows companies to create flexible meters and consolidate usage data, enabling them to experiment with pricing and better align with customer value.

What are the benefits of Zuora for Consumption?

Zuora for Consumption provides visibility into consumption habits, simplifies revenue recognition and compliance, and enables businesses to monetize complex consumption-based models.