Zuora, which was founded four years ago, focuses on services around what it calls the “subscription economy,” managing subscriptions to content and the billing behind it. Direct customers include News International, Reed Business Information, Qualcomm (NSDQ: QCOM), TripAdvisor, VNU Media, Ning, Ooyala, and Ustream, among others.

When Apple (NSDQ: AAPL) began to lay out the terms of its in-app subscription model for publishers on its iOS platform, Zuora’s CEO and founder, Tien Tzuo (pictured), was outspoken about Apple being potentially too powerful in dictating the terms of how the subscriptions would work, and how much publishers would get paid as a result.

Of course some of that could have been down to Zuora safeguarding its own place in the value chain, but from the looks of it, it would seem that both have been benefiting from the rise in subscription-based services.

Zuora said in a news release that it would be using the new funds to expand internationally as well as to launch new products.

Most immediately, Zuora is establishing new offices in the Netherlands, Germany, France and Ireland, and notes that it already has €2 billion ($2.7 billion) in subscription contract revenues in the EMEA region.

Leading this current Series D round was Index Ventures, along with investment from Greylock Partners, and a “personal investment” from Dave Duffield, founder and co-CEO, Workday. As part of the deal, Mike Volpi, a partner at Index and a tech industry veteran, will join the Zuora board of directors.

Existing investors include Benchmark Capital, Redpoint Ventures, Shasta Ventures, Tenaya Capital and Marc Benioff, chairman and CEO, salesforce.com also participated. Today’s funding round takes the total raised by Zuora to $82.5 million.

The company currently employs around 200 people.

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Between Zuora and Vindicia, the broad spectrum of industries is covered. Vindicia focuses on online merchants, whereas Zuora has customers spanning the media, telecom/mobile, consumer Internet, SaaS and cloud computing sectors. Zuora Founder and CEO Tien Tzuo sees the potential for an “explosion of telecom services” in the next few years, stemming from the advent of mobile technologies, although its cloud computing partnerships with Microsoft and VMware could prove profitable, as well.

The sheer amount of activity in what Zuora calls the “subscription economy” is what brought new investor Redpoint Ventures on board, and founding partner Tim Haley to Zuora’s board of directors. As the initial investor in Netflix, Haley has seen the effects of a successful subscription strategy. The activity is also what has Tzuo confident in Zuora’s decision to take so much money despite the success it and other SaaS startups, like New Relic, have had prior to recent funding. Zuora became cashflow positive in the first quarter of this year, during which time it brought in more than a billion dollars in recurring contracts, and New Relic had amassed 5,600 customers before its recent $10 million round.

Tzuo’s strategy is to go big when you have a big idea, which he adamantly believes subscription billing is. “Now is our time to step on the gas,” said Tzuo. “We want to triple our staff, we want to open national offices in 15 different countries. Our customer base is demanding even more innovation, and we’ve got 10 new applications that we would love to launch in the next two years.”

If Zuora can pull off these plans, it will look a lot more like an established vendor than a relatively new startup, which could make it all the more appealing to large software providers looking to round out their cloud or SaaS portfolios with a billing component while adding a profitable, and growing, line of business. Of course, several dozen customers and billions in contracted revenue will command a high price tag.

Disclosure: Giga Omni Media, parent company of this blog, is a Zuora customer.

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I’ll admit, I’m not normally an eggplant fan, but Tzuo’s simple preparation and grill technique made me a believer in the oblong veggie, which paired nicely with his bulgogi beef (and a little red wine to wash it all down). Check out how easy it all is to make here:

Thanks again to The Private Bank of the Peninsula for letting us use their grill set up in Palo Alto.

Despite the early-mover advantage PayPal has, and the presence of rival offerings from Internet giant Google, there are plenty of retailers who only accept credit cards for online purchases. That eliminates their ability to sell to those without credit and those concerned with security online. There are a few ways rival online payment services can find success against PayPal, wrote Jim Friedland, an analyst at Cowan & Co. earlier this week, citing a few examples: providing a neutral independent platform (PayPal is owned by web retailer eBay), extending credit to shoppers, and offering lower transaction fees.

And startups are still searching for other opportunities online. Just last week online bill pay startup eBillMe raised $12 million from Canaan Partners and New Celtic Ventures. The company offers vendors an alternative to credit cards by allowing shoppers to receive a bill at their online banking portal. This allows shoppers to avoid putting their personal information on the merchant’s site and allows for a cash, rather than credit, transaction.

But online sales are no longer limited to the PC. U.S. consumers are starting to use their mobile phones to make purchases, and this could be a growing market in the years to come. But there are challenges ahead. Bigger players such as PayPal and credit card companies already offer mobile-payment products, and the current U.S. market for mobile-pay services is still small.

Only 1.5 percent of U.S. consumers have ever used their mobile phones to make a payment, but almost 50 percent are aware that they can do so, according to a survey released this week. The research, commissioned by financial firm Mercatus, predicts that with better services and customer education the percentage of people who will make payments from their mobile phones is likely to grow in five years to 15 percent among those ages 18-30.

The growing use of smartphones and shopping sites optimized for mobiles require payment options that are easier than keying in a 16-digit credit card number. Startups such as angel-backed Billing Revolution and Zong, which launched earlier this month after raising more than $12 million in venture capital, are tackling the problem of buying on your mobile phone. Zong sends purchase information to carriers, who then bill the subscriber for their purchases, and Billing Revolution offers a mobile credit card processing platform. In April, Obopay scored $20 million for its money-transfer-via-mobile efforts.

While the opportunity in mobile is still just cresting the horizon, enterprise customers provide an immediate opportunity for startups seeking to streamline transactions. In March, two startups offering an online billing platform for companies delivering Software-as-a-Service (SaaS) products raised money. Zuora brought in $6.5 million in first round funding led by Benchmark Capital for its platform. Rival Vindicia announced a $5.6 million round led by DCM and Leader Ventures.

These companies aim to make it easier for SaaS vendors to track and bill all of their customers. They also help customers track and manage multiple software services they might be buying — a task akin to managing household bills from tens or even hundreds of service providers. Tim McAdam, a general partner with Trinity Ventures, says these sorts of billing platforms and ways to track payments still represent a big category and no one has mastered it yet.

With everyone searching for ways to make money online that don’t revolve around advertising, offering seamless but secure online payments will go a long way in enabling alternative business models.

This article also appeared on BusinessWeek.com

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Salesforce.com sold the world on the idea that software can be sold as a service to which you subscribe and not as a physical product that you purchase. Today more than 1 million people subscribe to Salesforce.com’s CRM services, making box-packaged software a relic of the past. And this trend towards subscription services isn’t limited to software. From DVDs to cars, products that we once purchased are transforming into services to which we now pay for as we use. Why buy a DVD, when you can subscribe to Netflix and choose from a whole library? Why buy a car when you can subscribe to ZipCar and get a whole fleet?

However, one problem remains that prevents a subscription services world from becoming reality: Older business operations systems, built for a manufacturing-centric world in which products are purchased, don’t translate easily to subscription-based businesses.

In the product world, completing a sale is straightforward: A product ships, an invoice is sent, the customer pays, and the financials are complete. In the subscription world, the financial relationship is ongoing and ever-changing. Invoices are generated on a recurring basis –- monthly, quarterly, annually or even daily. And customers can request service changes anytime: add more users, add more services, change pricing plans, cancel service –- changes that must be handled by supporting financial systems.

At Zuora, our goal is to create an enabling platform that handles business operations and subscription billing as dynamically as subscription service businesses deliver their own services to customers. Coremetrics, a classic subscription service provider, offers its marketing optimization solution as an ongoing service; its sales are based on a dynamic relationship with the customer, and pricing depends on many variables. With its subscription business rapidly outgrowing its billing system, Coremetrics faced a challenge: Existing systems built for one-time transactions in the product world just didn’t fit the bill.

Today’s business operations systems are inadequate; they force subscription businesses to adopt overly simple pricing plans that don’t monetize their services well. Manual processes remain that prevent the systems from scaling, and the systems provide inadequate information for managing a complex subscriber base. Old infrastructure holds SaaS companies like Coremetrics back.

Our platform aims to change that. In the case of CoreMetrics, we handle all Coremetrics’ customer accounts and subscription information: Each billing cycle, the Z-Billing application collects relevant subscription data, automatically computes the recurring and variable charges, and delivers invoices to customers in a timely manner. It helped reduce billing errors and streamlined recurring bill processing. With Z-Billing, Coremetrics has eliminated eight different spreadsheets and now meets regulatory and compliance requirements.

I now believe that subscriptions aren’t just the future of software; they are the future of our entire economy. The drivers are simple: greater control and fewer upfront costs. With the right tools in place, subscription services make it easy for everyone to spend less and access more. Salesforce.com subscribers pay as they go, eliminating the need for up-front capital investment. ZipCar subscribers lose the costs of owning a vehicle for the flexibility of reserving one whenever they want. Subscription is, I believe, simply a better economic model — one that distributes resources more efficiently and forces vendors to take a services mindset and create value closest to customer needs.

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In the age of the cloud, you can outsource everything. To me, outsourcing a billing system for a software-as-a-service provider seems like a hardware vendor outsourcing its inventory management, but I suppose just-in-time manufacturing has worked out for the hardware guys. So I’m trying to push aside my doubts about these new companies offering outsourced billing for anyone providing subscription services.

In addition to Zuora there is Austin, Texas-based eVapt, which doesn’t provide help in setting pricing the way Zuora does, but also recently closed a small $250,000 seed round. Ranjit Nayak, founder and vice president of marketing at eVapt, says The Economist Group is using eVapt’s service to track and invoice subscriptions and articles purchased on its sites. Another player in the space, Ireland’s LeCayla, was purchased in February by SaaS applications host OpsSource.

Right now, these guys are targeting SaaS vendors because they clearly understand the model, but both Tzuo and Nayak point to other subscription service providers — from online gaming to NetJets — as examples of companies that could use their services to get rid of another layer of complexity in their business.

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