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Zuora, a startup that offers software to manage customer subscriptions, just announced its second product, dubbed “Z-Payments.” While Zuora’s first product, Z-Billing, automates the billing process (duh), Z-Payments handles the other side of the equation — actually allowing customers to pay those bills, including integration with online payment service PayPal.

The product addresses a common complaint among Zuora customers, says chief executive Tien Tzuo — billing customers isn’t always enough. There are always people who don’t pay, or payments that don’t go through, and companies often lack the staff to deal with every one of those problems.

“The net effect is they end up not collecting all the money they can collect,” Tzuo says.

That’s where Z-Payments comes in. It manages not just the act of getting paid, but also all the issues that can pop up surrounding payments. So a company can use Z-Payments to notify their customers when their credit cards are are about to expire, or send out suspension warnings when customers fail to pay. It’s all customizable, Tzuo says, allowing each company to offer its own payment terms, and to set its own penalties for non-payment. The product has already been tested out by helping storage startup Box.net and Facebook application Teach the People handle their subscriptions and payments.

Before founding Redwood City, Calif.-based Zuora, Tzuo spent nine years at Salesforce.com, and he left with Salesforce chief executive’s Marc Benioff’s blessing — in fact, Benioff invested in Zuora. Like Salesforce, Zuora delivers its service through an online subscription, i.e. through the software-as-a-service business model, making it cheaper and easier to set up than the established solution from Portal Software.

The new product sounds like a smart step towards Tzuo’s goal of turning his company into the primary “online subscription platform,” in the same way that PayPal is the platform for online payments, and Google is the platform for online ads. It also gives Zuora an advantage over Aria, another company that offers to automate subscriptions and billing through a SaaS model. Z-Payments will be available for free to Z-Billing customers, and as a standalone product with a base price of $500 per month.

Zuora launched earlier this year and has since signed up more than 40 customers. It raised $6.5 million from Benchmark Capital and from Benioff. Tzuo says the company has plans for other products and features to make handling subscriptions easier, and is also developing a module for Salesforce’s Force.com platform.

Tapulous, a new Silicon Valley startup, embodies the craze that’s going on right now around the iPhone.

Tucked inside a ground-floor office on Hamilton Ave. in Palo Alto, Calif., a stone’s throw from social network comany Facebook, the company’s eight employees are feverishly building applications solely to work on the iPhone.

Never mind that the Apple has sold a mere six million iPhones to date, compared to Nokia’s 400 million handsets. Tapulous’ chief executive Bart Decrem believes the iPhone’s interface –featuring a multi-touch full screen and now 3G speed — is sparking a revolution akin to what Microsoft Windows did to DOS on the PC.

He’s pulled together a team of developers to build out a slew of applications designed to be social at their core, believing this will help “viral” distribution. He’s vague on the details, but says he wants applications to feature personal profiles that will allow for social networking across the applications.

Just as RockYou and Slide exploited the Facebook platform by producing scores of applications to see what would stick, Tapulous wants to be the equivalent for the iPhone. It has developed three applications to launch in time for the opening of the iPhone App Store, scheduled for tomorrow, and has scores more apps in waiting.

The iPhone App Store is where people can download applications for their phones — these apps will work on the new iPhones, old iPhones and iPod Touches. Tapulous aims to offer developers a home to help them build applications and monetize them, Decrem says. One intern asked for a room to sleep in as the only condition to build applications for Tapulous.

Decrem (pictured below, left) is a great salesman. Previously, he cofounded Flock, the browser, and he pitched it so well in the Valley that it became over hyped and never lived up to its promise. Flock is still alive and kicking, but Decrem has moved on. He’s trying to dampen his salesmanship this time around, he concedes, but it’s only minutes into the conversation before his enthusiasm picks up and he speaks in superlatives: “This will be bigger than the PC revolution,” he says of the iPhone, citing a statement made by John Doerr, a partner at venture firm Kleiner Perkins. He also cites a Piper Jaffray analyst prediction that there will be 90 million Apple smartphones in use by the end of 2009. He cofounded the company with Andrew Lacy and Mike Lee. He’s hired developers like Sean Heber, who became a legend of sorts when he built 30 applications for the iPhone in 30 days.

On the surface, Twinkle (screenshot above, and more at bottom) is the most intriguing of Tapulous’ applications. It’s a Twitter client, meaning users access the popular micro-messaging product Twitter on the app, pulling and pushing in tweets (Twitter messages) just like they would on Twitter. But Twinkle will support photos, and it’s more flexible than rival Twitter client Twitteriffic because it lets people message with other services besides Twitter. Twinkle also lets people see which users are located close to them (by tapping into the iPhone’s location technology).

Since launching in March (for “jailbroken” iPhones — phones where users have bypassed carrier restrictions to downloaded applications), Twinkle has had 80,000 people download it, Decrem says. To be sure, a lot of other startups also aim to become the location-based social networking application of choice for the iPhone. These include Loopt Read the rest of this entry »

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Zuora is a Silicon Valley company that says it offers a simpler, less expensive way for companies to offer online subscription services. It launches today announcing it has gotten $6.5 million in a first round of funding led by venture firm Benchmark Capital.

Until now, software companies like Salesforce or gaming companies like World of Warcraft have faced a lot of pain in selling their products to subscribers.

The main provider of subscription services to date has been Portal Software, but it costs between $1 million and $3 million to implement. Aside from paying for Portal’s software, you have to employ consultants to help implement it, create a database and maintain it all. Meanwhile, smaller companies unable to afford Portal are forced to do their sales by hand, using an Excel spreadsheet, or relying on a credit card company which lets customers make an automatic payment every month.

With the explosion of software companies offering their software as a monthly subscription (known as Software as a Service, or SaaS), Zuora’s chief executive Tien Tzuo said he thinks there’s a significant market for its product. Zuora will begin by targeting SAAS companies, but they cater to all kinds of services, including game companies like WoW.

Zuora, based in Redwood City, Calif., was founded by executives who previously worked at Salesforce and WebEx who found that Portal wasn’t working for them. Tzuo spent nine years at Salesforce, and he led the company’s project to build its own subscriptions services product. Tzuo then decided to leave Salesforce to start his own company specifically designed to offer these services. Rather than discouraging him, Salesforce’s chief executive Marc Benioff encouraged him to do so, and agreed to invest as well. Tzuo’s co-founder, Cheng Zou, who is chief technology officer at Zuora, built the subscription billing service used by WebEx.

Zuora’s first customer is Coremetrics. Zuora says it will undercut Portal significantly, charging on the order of a few thousand dollars a month. Benchmark’s Peter Fenton joins the board.

[Update: We failed to mention another competitor, Aria, which has served SaaS companies with a billing services for more than three years, but it has focused on the gaming industry (our coverage). It raised $4 million in a first round of capital from venture firm Hummer Winblad back in October, and counts  Flagship Studios, Hellgate London, DigitalBridge, ZoomInfo and others among its customers. Aria says  it has been used in more than 236 countries.]