(Bloomberg) -- Ten-year-old Zuora Inc. names Oracle Corp. and SAP SE among its competitors. But to Chief Executive Officer Tien Tzuo, these software giants couldn’t be better rivals.
“It’s hard for us to ask for a better competitor, they’re just not innovating, they’re buckling under their own weight,” Tzuo said Thursday in an interview at the company’s second-annual Subscribed conference in New York.
Since Zuora’s initial public offering in April at $14 per share, the stock has had a wild ride, rising above $37 in June before falling sharply in August following second-quarter earnings. The shares rose 6.8 percent to $19.04 at 9:33 a.m., snapping a five-day losing streak.
Zuora makes software to help businesses launch, manage and transform into a subscription business. The San Mateo, California-based firm helps companies such as Box Inc. and Autodesk Inc. with pricing, payments and collection in markets around the world. And Zuora is betting on growth of the subscription economy to drive demand for their services as more businesses shift from a traditional products model to a recurring revenue stream.
While Oracle and SAP provide a range of software services including subscription billing, Tzuo said his firm is the leading market player focused on subscriptions.
While not out of the question, Zuora doesn’t plan any acquisitions in the next two to three years, according to Tzuo. “We are definitely open to it, but it’s not built into our strategy or models,” he said.
Morgan Stanley analyst Stan Zlotsky said Thursday’s event underscored the “very healthy underlying demand for Zuora’s billing platform.” He said in a note to clients that this should be “an important growth lever moving forward.”
(Updates with shares in third paragraph and analyst comments in seventh.)
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