Software as a service, usually offered on a subscription basis, requires new ways of billing for those services. Zuora's Z-Billing platform--itself offered as a hosted service--is aimed at the SaaS market, but CEO Tien Tzuo expects other companies will need a billing engine, too, as they transform all kinds of products into pay-as-you-go services. --John Foley

SaaS, storage as a service, and servers as a service are targets for Zuora's billing engine, but the startup is aiming more broadly. CEO Tzuo points to online movie services and rent-by-the-hour cars as examples of a trend toward offering many kinds of products and content as subscription-based services. "We think that's the wave of the future," he says.

Z-Billing is comprised of three modules. A product catalog supports custom price plans that can include one-time, recurring, and usage-based charges and that get billed monthly, quarterly, or annually. A customer subscriptions module manages subscriptions, renewals, and change orders and provides analytic and reporting capabilities. A billing operations module automates billing and collections. Zuora provides pre-built integration with Salesforce and a Web service API for do-it-yourself integration.

Zuora's founders were early movers in online services. Tzuo spent nine years at Salesforce where, in addition to serving as chief strategy officer, he built the company's original billing system. Co-founders Rao and Zou are veterans of WebEx (acquired last year by Cisco). Last week, Zuora announced that PayPal president Scott Thompson has joined its board of directors, bringing his experience in online payments. Salesforce CEO Benioff is among Zuora's early investors.

The founders' experience and connections give Zuora legitimacy as the SaaS market heats up. Zuora signed 17 customers in its first two months. Competitors include Aria Systems, eVapt, and OpSource.