Theme A:
Knowing the Market, Cloud Models, and Ecosystem (7 points)
1. Describe which market segment(s) Zuora serves in the time-frame and setting of the
case? (1)
Zuora Software serves Software as a Service (SAAS) for billing market with product line of Z-billing,
Z-payments and Z-commerce platform to market segment(s). that provide offline subscription
businesses like AT&T & Zipcar. Zuora also provided a subscription based service to the companies
with online subscription based model.
2. Summarize from the case the nature of complexity of Services business (vs.
Manufacturing)? Specifically, why do Services businesses have billing complexities? Cite
examples of such complexities from the Zuora case – and optionally, from other sources
– to substantiate your reasoning. (3)
Complexity of Services business comes from need to provide various plans based on customer
needs like multiple types of pricing schedules, frequency of billing, usage, volume-tier, metering,
billing location etc. whereas in other business like consumer goods sales, billings is for the goods
sold and is fairly easy to build by assigning item-code and price to all of the inventory items.
Manufacturing is transactional and onetime while services are recurring and reputable.
Billing consists of several sub-sectors like payment gateway, payment processors, and other
customized revenue collection methods without a clear value chain Services business come from
need to have
In Zuora case, AT&T and Zipcar have been mentioned as two examples.
AT&T, a mobile network provider provides many plans to their customers single person plans or
family plans. Other determining factors for billing are change in the pricing plans, taxes, one-time
fees, taxes, location of the customers and taxes as per that location. All these factors lead to a very
customized billing solution for AT&T.
Similarly for a car rental company like Zipcar, there are many pricing points to factor into
determining a customer’s bill like which car brand and model customer is renting, for how many
days or hours a car is rented, whether it is a weekly package or monthly package, whether
additional insurance was bought, state and city taxes, late fines etc. Like AT&T, Zipcar business
will also need a customized billing solution
3. Elaborate which cloud delivery / consumption model(s) and which deployment model(s) is
used by Zuora products? Draw simple diagrams to clarify and accompany your brief
narrative. (1.5)
Zuora uses SaaS delivery model to offer businesses a subscription-based service. Zuora used its
multi-tenancy private cloud deployment model to achieve economies of scale through efficient use
of hardware to serve their large base of customers.
4. Gleaning from the case, draw a diagram of the ecosystem of payment and billing
providers, show their role / relationship with each other and/or with merchants, and show
clearly Zuora’s place in this ecosystem. (1.5)
Theme B:
The Challenges & Opportunities of Multi-tenancy in Cloud (5 points)
1. Research and report what security pain points a cloud multi-tenancy provider like Zuora
would face? (1.5)
1.Single point of failure: SAAS software can become single point of failure for all clients due to
interruption in systems’ avilabilty
2. Data Security: Since the clients in Multi-tenant SAAS system share the same software, the
software should provide sufficient protection against each clients privacy of information. Building
the right security as per each client’s need and types of transactions they perform becomes very
important
3.Logical separation of Clients’ data: Since all the clients share the same database system,
archival and recovery of each client’s data needs to be build efficiently.
4.Data Privacy/breaches: If due to any software vulnerability, company gets into data loss and
privacy breach, it could potentially expose its all clients data causing SAAS provider , a hefty
amount of data breach penalties
5 System performance: One clients running heavy transactions could cause overall degradation
is systems’ performance. E.g., One Client generating monthly customers statement could end up
using most of the system’s processing capacity and hence impacting other clients
2. For the above points, recommend 2 security measures you would advise to Zuora in
securing a multi-tenancy environment. Be clear about which security pain point you are
addressing, and what mitigation measure is recommended. (2)
Physical Separation of clients data: Zuora could create separate databases for each client so
that each client’s performance is independent of other clients system and it will be easy to
recover any client’s data from their backups in case of data corruption and assist in better
planning for clients data growth and capacity management.
Data Privacy/breaches: Zuora needs to have the high security standards implemented to guard
against clients data . Data storage and transfers should use encryption and principle of least
privilege for its employees managing the SAAS system
3
For 2 above, draw appropriate diagrams to accompanying your narrative.
(Your investigations can source from the Zuora case material or from the Internet or other
sources) (1.5)
Physical separation of data in Multitenancy
Data Encryption
Theme C: Impact of Cloud to Business Model & Business Operations (3 points)
1. Identify from the case and elaborate on 2-3 business operations challenges which are
unique to (a) a company such as Zuora in becoming a cloud provider, and (b) a traditional
software company in becoming a SaaS provider such as some of Zuora’s customers. (3)
(Hint: Examine in the case for dynamics around cost structure and revenue in light of
above change)
For company as Zuora, main challenge in becoming a cloud provider are
(a) Expand the sales capacity to capture the broader cloud market
(b) Necessary upgrades could be costly and time consuming
(c) Since the burn rate increases, the company would have challenge to stay cash flow
positive
The challenges in become a traditional SaaS provider are lower margins as
(a) The vendor must both host and operate the software in company’s datacenter
(b) ensure minimum outages
(c) Quick roll-out of new features and bug fixes
Theme D: Summing it up: Take a position (5 points)
1. The case ends with Zuora considering three possible scenarios:
•
Scenario 1 – Continue to focus on billing for the SaaS industry
•
Scenario 2 – Expand to capture the broader cloud computing trend
•
Scenario 3 – Grow big fast and try to capture the broader subscription opportunity
Arrive at your independent recommendation on which of the 3 scenarios should Zuora
take – in the 2009 time frame the case is set. Provide your reasoning. (4)
Scenario 1 -. Since Zuora is already a big leader in SAAS industry, specializing in SAAS billing
and other current service and focus on expanding these seemed to be the best and safe option
even if had a small growth of 30-50 percent
Determine from current Zuora web site, company/industry analysis, and other sources which of
these paths (or other) did Zuora end up. (1)
Zuora went with Scenario 1 to Continue to focus on billing for the SaaS industry
Bonus Questions (5 points)
1. Zuora & Zipcar: The case alludes to Zipcar, the car-sharing service, as an example “offline”
company in the “subscription economy”. Draw and accompany a brief narrative of the
sequence flow between a user of Zipcar and its use of Zuora services. (4)
Zipcar is the largest self-service car rental and sharing services that a customer could rent for days or
hours and pay per use. A customer may book this service anywhere and by any means, mobile app or the
internet application. The final prices paid by the customer depends upon many factors like whether a
customer has any recurring membership, customer used any discounts like student discount, coupon
discount and/or there are additional cost to be added like unfilled gas or added insurance by the customer.