Billing is dead. 💀 This bold statement isn’t just speculation—it’s the clear message from Zuora’s recent $1.7 billion acquisition and its subsequent pivot into the private domain. As the subscription management pioneer takes a step back to recalibrate, it’s time for us to take a closer look at how we arrived here—and what lies ahead for the billing market.
A Look Back at Zuora’s Journey
Tien Tzuo, Zuora’s visionary CEO, was among the first to recognize and capitalize on the Subscription Economy. From its roots with the original Salesforce crew to its meteoric rise as a leader in subscription billing and management, Zuora was built to revolutionize how companies monetize recurring revenue models.
Today, Zuora boasts $400M ARR and an impressive client roster, including SaaS powerhouses like Zoom and Box, as well as diverse enterprises like GM and Ubisoft. With 400+ customers paying $250K+ annually, Zuora was undoubtedly a trailblazer.
But growth slowed. Despite their early dominance, Zuora struggled to sustain momentum:
- 9% YoY growth—far below industry expectations.
- 104% NRR—a concerning figure for a space that should promise strong retention.
What went wrong?
Behind the Numbers: The Challenges of Billing Monoliths
To understand Zuora’s struggles, we must look at the bigger picture of the billing market. Billing, especially for enterprise-scale businesses, is complex. Long sales cycles, high switching costs, and implementation challenges can weigh down even the most innovative solutions.
Zuora attempted to stay competitive through acquisitions, including Zephr (digital media focus), Togai (usage-based pricing), and Sub(x) (media solutions). While strategic, these moves were more reactive than transformative. Meanwhile, competitors like Stripe—powered by its payments empire—continued to gain ground. Stripe’s valuation of $70 billion and estimated $14.4 billion in gross revenue showcase the power of tying billing to payments.
Even with Zuora’s entrenched position in large enterprises, its monolithic approach to billing created inherent challenges:
- Conflicting demands from Finance, Sales, RevOps, and Product teams made it impossible to deliver a one-size-fits-all solution.
- Implementation headaches led to high onboarding costs and slower time-to-value for customers.
- Competitors—Stripe, Salesforce, Chargebee, and startups with a usage-based focus—brought nimble, specialized solutions, further fragmenting the market.
The result? The billing monolith faltered.
A Fundamental Market Shift: The Death of the Monolith
Zuora’s struggles highlight a deeper issue: the collapse of the billing monolith concept.
The market no longer wants a single system trying (and failing) to serve everyone. The rise of best-of-breed solutions shows that companies are demanding flexible, interoperable, and purpose-built tools that cater specifically to their needs:
- Sales teams need tools that enhance quoting flexibility and deal velocity.
- RevOps teams demand solutions that support their growth efficiency and deal desks.
- Finance teams prioritize precision in financial planning, governance, and risk management.
- Engineering and Product teams seek scalable infrastructure to monetize emerging technologies like AI.
These diverse needs cannot coexist harmoniously in a monolithic system. Instead, the market is pivoting toward modular, interoperable stacks that offer a superior user experience for each team.
What’s Next for the Billing Market?
The writing is on the wall: the modern monetization stack is taking over. Companies are breaking down the billing monolith into its core components, adopting specialized tools for specific needs. The winners in this space will embody these principles:
- Interoperability: Seamless integration with other systems.
- Extensibility: Flexibility to adapt as business needs evolve.
- Focus: Delivering 100x better experiences by solving one problem exceptionally well.
Zuora’s transition to private ownership may give it the agility to reinvent itself. As Tien Tzuo hinted in his employee letter, this move is about flexibility and innovation—a potential attempt to “press the reset button.”
Meanwhile, new players are emerging to meet this market shift head-on, ushering in a new era of modern, modular billing solutions.
Thinking of Migrating Away from Zuora? It’s Easier Than You Think
Migrating from Zuora to a new billing provider might feel complex, but Stigg simplifies the process with a developer-friendly approach. Here's how:
- Integrate Your New Billing Provider for Future Customers
Use Stigg as an abstraction layer to integrate a new billing provider, such as Stripe, seamlessly. This can be done without writing any code, allowing you to redirect future customers to the new provider with minimal effort. - Migrate Existing Customers to the New Provider
Moving existing customers from Zuora doesn’t have to be a time sink. Stigg’s tools make routing customers and subscriptions straightforward, with no-code solutions available for standard cases. For edge cases or advanced needs, you can overwrite the default routing behavior using code, giving you maximum flexibility and control.
By decoupling your systems from vendor lock-in, Stigg acts as the “Segment” for billing providers, giving you flexibility, extensibility, and a modernized billing architecture.
This approach allows you to transition smoothly while maintaining the precision and customization your billing system requires.
Ready to start? Explore how Stigg can help transform your billing stack! Try Stigg now or schedule a demo today.
-----------------------------
Disclaimer: This blog post was inspired by a recent LinkedIn post from our Co-Founder and CEO, Dor Sasson. The enthusiastic response and thoughtful discussions it sparked confirmed that we struck a chord with many in the industry. Thank you for engaging with us!
