The news that Zuora plans to be taken over by private equity firms Silver Lake and GIC for $1.7bn represents an interesting pivot point for the company. Zuora was initially a pioneer in managing the billing and revenue reconition as the subscription economy took hold. However, the space has commodified a bit over the past years and other competitors like Chargebee, Recurly and others, as well as CRM providers themselves have built out comparable tool sets.
CEO Tien Tzuo says the move will allow the company to focus on further buildout of its monetization suite. But...there are a number of focus areas the company must address to remain competitive. On the one side, Zuora has offered a bit of AI-powered tools, such as a copilot offering and AI assitants - but those tools are mostly focused on simplifying and making more useful the analytics data in the product offering. The company should be developing tools focused on helping end users, revops personnel etc. more productive in their daily operations tasks via AI assitants and agents. Also, while Zuora was a pinoeer in subscription billing, some may claim it could be falling behind in terms of supporting billing and monetization motions around new models like consumption-based pricing, micro-payments, and other product-led growth motions.
Revenue Platforms have emerged to leverage more AI, cover more revenue models, and support "full journey" (pre-and-post sales growth opportunities). Companies like Clari are reinventing their platforms with a heavy focus on having a larger data set (see its "RevBD" concept) and other companies that initially were about supporting sales reps are becoming revenue platforms in their own right (think Gong and Salesloft among others). Meanwhile, Salesforce announced deeper support for subscription and consumption-based models, as well as overal product-led growth go-to-market motions. In short, it is an increasingly competitive space, the pace of innovation is increasing, and Zuora is hopefully gaining the capital it needs to stay relevant. However, will it still be able to compete in terms of hiring top-tier development and other talent on the product side as a PE-backed company? The lack of equity incentives can sometimes cause both a migration out of existing talent, and an inability to attract solid talent who can bet on RSUs from public companies.
For users, now is an interesting time. As more and more vendors in the space offer a broader set of features, as well as varying levels of AI copilots and agentic AI - subscriptions up for renewal should include a step back and force a reevaluation of the go-to-market tech stack; identifying opportunities to streamline and optimize. Significant cost reductions, and reduced IT complexity can be gained as CRM vendors and others offer a broader set of billing, revrec and other support for emerging revenue models.
