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MGI 360 Ratings - Zuora in Billing Management SEP 25 2018

RATING UPDATE: We increase the MGI 360 rating of Zuora in the Billing Management market from 62 to 63 and re-iterate a POSITIVE outlook.
OPINION: Product score increased from 12.62 to 12.84 reflecting a roll out of the Zuora Collect product and synergies from relatively successful absorption of the Leeyo Automated Revenue Management product. Management scores went up from 13.33 to 14.35 as the team has shown good execution during and post-IPO, improved cohesion and alignment as well as quality management talent additions across the board. Channels score increased from 11.98 to 12.11 owing to higher sales productivity. Strategy and Finance score remain unchanged. Entry of into the Agile Billing market will likely put more pressure on the company in some market segments but may also be a positive as Salesforce is likely to invest heavily into marketing in this space. When compared to the early entry by Salesforce, the Zuora solution is broader, deeper more mature and backed by a more seasoned team. The next few quarters will continue to test Zuora management team skill in managing growth, talent and the competitive landscape while also trying to delight not only customer but investors as well. In our view, Zuora still has a significant growth opportunity.
USE CASE: Monetization projects that need full spectrum subscription management with medium transaction volumes and modest to moderate complexity across a range of company sizes (from SME to very large) with billing value of $25Mil to $1Bil as the sweet spot.
COMPANY DESCRIPTIONZuora was founded in 2007 by former Webex and execs K.V. Rao, Cheng Zou and Tien Tzuo and has privately raised over $250Million in VC and institutional funding and over $150Mil in a recent IPO. Customer count is around 950. Annual customer billing volume is $7Billion with and average customer billing about $7.4 Million per year. Zuora sells its solutions directly via a direct sales force and leveraging partnerships with companies such as, Accenture, Deloitte, Cognizant and PwC. Zuora brand visibility, funding, pure-cloud architecture, deployment methodology and size of channel separate Zuora from the rest of the next-generation, SaaS-only vendors.
COMPETITORS: SAP Billing, Oracle BRM, Aria Systems, goTransverse, BillingPlatform, BluLogix, RecVue,
MGI 360 Ratings is a comprehensive system for evaluating technology companies. IT organizations use MGI 360 to track suppliers, assess purchasing risks and identify promising new vendors. Vendors utilize MGI 360 to track their markets and evaluate partners. Institutional investors use MGI 360 for independent assessment of tech companies. MGI 360 ratings help lower costs, save time, reduce risks, and identify new opportunities. 
The MGI 360 ratings are on a scale from 0 to 100 and reflect company opinions of MGI analysts in five key areas on a scale of 0 to 20:
  • PRODUCT: How strong is the product competitive position
  • MANAGEMENT: How competent and experienced is the management team
  • CHANNELS: Does the company have a sales capability and channels needed to bring products to market?
  • STRATEGY: Does the company have a realistic view of the opportunity and a compelling strategy for success?
  • FINANCE: Is the company growing and profitable
Each of these key criteria is subdivided into numerous sub-categories. In total, over 149 criteria are combined to generate an MGI 360 rating in each specific market space. Companies can have one or more MGI 360 rating - one for each market. MGI 360 ratings are revised as important developments occur. While the MGI 360 rating process is comprehensive, this scoring system is not meant to be a predictor of company solvency, liquidity, absence of accounting fraud or stock performance. Access to MGI 360 Ratings is by subscription.
MGI Research is an independent industry research and advisory firm focused on disruptive trends in the technology industry. Through ratings, industry benchmarks, best practices groups, subscription research, market forecasts, advisory engagements, industry studies and conferences, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks. MGI Research analysts work closely with business and technology organizations to help make timely go/no-go IT investment decisions, optimize vendor relationships, and create practical strategies for new initiatives in agile billing, payments management, order management, CPQ, contract lifecycle management and other elements of agile monetization platform (AMP).
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