The Subscription Economy Is About Strengthening Customer Relationships, Not Just Recurring Revenues

The other perspective from Tien Tzou, It’s not about subscriptions versus pay-per-use. Just as industries have different needs, businesses and customers are different and so have varying needs.


Editor’s note:Tien Tzuo is the CEO of Zuora, a subscription billing company. Follow him on Twitter @tientzuo.

TechCrunch recently ran a post by Ray Sobol, founder and CEO of EvidencePix, called It Might Be Time To Ditch The SaaS Monthly Subscription Model. In it he argues that a pure pay-as-you-go approach is better than a monthly subscription model because customers only pay for what they use.

But Sobol is missing the point. One hole in his argument is that it undervalues the importance of predictability for customers. For instance, in the mobile phone world, many consumers like unlimited voice or data plans, because they don’t want to feel like they are constantly “on the clock.” In addition, he seems to be advocating for a reduction of options for customers. In the same mobile phone world, customers enjoy a buffet-style approach to pricing: prepaid, monthly usage buckets + overage…

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It Might Be Time To Ditch The SaaS Monthly Subscription Model

Is a pay per use model fairer than a monthly subscription?


Editor’s note: Ray Sobol is founder and CEO of EvidencePix, an enterprise-grade secure MDM service. Ray has more than 25 years experience in launching high-tech ventures and disruptive technologies.

No one likes to pay for things they don’t use. If you’ve ever grappled with the fact that you’re paying for 500 channels on your monthly cable bill when you only use a few, you know what I mean. The same problem holds true when it comes to software. An average business purchases more software than is actually needed, and we’ve all had software installed that we used sparingly. It’s time to let customers pay based on what they actually use.

The Evolution Of Software Pricing Models

The past two decades have brought significant changes to B2B software sales. SaaS upended traditional software licenses and made install disks an artifact of the 90s. Then, hefty annual SaaS subscriptions gave way to…

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Here’s How Spotify Scales Up And Stays Agile: It Runs ‘Squads’ Like Lean Startups

Great information on how Spotify keeps the Lean Startup approach alive using squads


What’s the secret to staying fresh, lean and mean when you’re a hot tech company on a fast growth trajectory? A fascinating document brought to our attention today today by Andrew Mager, hacker advocate at Spotify, answers that question in some detail by telling us how the music streaming juggernaut does it: by dividing up its business into small clusters — which it calls ‘squads’ — and running each like a startup in its own right. We’ve embedded the document below.

The information here is all the more relevant since this week we saw that Spotify is now finally making a move on to the web. When that is fully live, it could open Spotify up to another big growth boom from a whole new population of users beyond the 15 million early adopters (4 million of which pay) who currently use its mobile and desktop clients.


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The cloud backlash could be deep


The easy answer is rarely the right answer, which is a hard truth about life in general. In this case, I think it applies to the cloud marketplace. I’m concerned that we are overselling a very good set of solutions (which I will loosely define as “Cloud” options) as some sort of magic pill that will solve their business and IT woes.

Customers have come to understand the potential of having an agile IT environment, but by and large most of them don’t fully understand what that means for their current IT model or organization and legacy environments. I fear that we are heading to a point in the next 12 months where we will see a strong customer backlash in the form of brake lights or return to sender notes.

If your solution can stand the light of day, then you shouldn’t have any trouble helping your potential customers…

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Business process API-ification: The LEGO promise fulfilled

The way of the future


My previous post on the API-ification of software focused on the ecosystem of infrastructure-level APIs. Today, I want to discuss companies providing APIs that operate at the business process or application layer, which brings a whole new level of productivity and revenue potential to businesses.

Amazon(s amzn) has clearly been leading the way in API-fication by providing a broad range of fundamental software services packaged as APIs. From the basic EC2 compute and S3 storage capabilities, they have expanded to now offer more than 30 services across infrastructure categories of compute, storage, networking, database, deployment/management and messaging. All of these components are incredibly valuable and important, but an application developer still has to construct higher level business processes from these fundamental building blocks. In addition, they have launched the AWS Marketplace, which is a catalog of hundreds of software packages that cover everything from application development to traditional business software…

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Treasure Data Launches Cloud-Based Data Warehouse With Investment From Ruby Creator Yukihiro “Matz” Matsumoto

Cloud based value add to traditional data warehouse


Cloud-based data warehouse company Treasure Data officially opened its doors this week with $1.5 million in funding that includes an investment from  Yukihiro “Matz” Matsumoto – the creator of the Ruby programming language.

The other investors include angel investor Bill Tai; Naren Gupta of Nexus Venture and a director with Red Hat and TIBCO, as well as the people behind Gluster and Heroku. Gluster sold to Red Hat last year and Heroku is now part of

Treasure Data has developed a service that brings high-end analysis to the business or business unit that has traditionally not had the resources to afford a solutions from companies like IBM, Oracle or Teradata. Founder and CEO Hiro Yoshikawa says the total cost of ownership for a data warehouse suite from one of the enterprise players can cost as much as $5 million. In contrast, Treasure Data is a subscription service that, at the…

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