Alcatel-Lucent Enterprise sells communication and networking solutions to enterprises of all sizes, In recent years, they were seeing their industry undergoing a lot of transformation. They were facing large players that were putting a lot of pressure on price and margin because of their scale. But they were also seeing a lot of small players, entering the market by providing a very small feature set, but with a great user experience which was proving very attractive to end users who were hungry for new ways to purchase technology.

To compete, ALE realized they had to adapt their pricing models and business models — and become a cloud service provider.

Their current customers were customers who had invested in one-off payments. What they wanted to build was recurring revenue, wherein their customers wouldn’t just be one-off customers, but customers with whom ALE could build a relationship over time. As Pierre-Yves Noel, Cloud Services Product Owner at Alcatel-Lucent Enterprise, put it, “We wanted to build relationships where we could provide our customers with our technology at the core on-premise, but also overlay cloud services to complement our revenues.”

To achieve this, ALE needed to innovate from a technology perspective, as well as innovate on their business model. According to Noel, this was challenging: “We were definitely struggling with the flexibility of our existing IT landscape. We were using SAP and Oracle as ERPs but we did not have the part of managing subscription finance within our company. Zuora provides us with the flexibility to build those new business models.”

ALE enjoys the pricing flexibility enabled by Zuora. With their different business models, they can price per user, per port, or by usage.

They’ve also used Zuora to build a unified communication as a service platform. Some of these services are provided as overlay to their existing customer infrastructure as a freemium offer. Then they propose premium services on top of the freemium offer, that they monetize through self-service inside the application. There’s no limit to what they can build or how they can price.

“Before Zuora, on our old platform, we weren’t able to launch these kinds of services. We didn’t have flexibility in terms of pricing strategies. Time-to-market was also holding us back. And we didn’t have the ability to manage all the invoices and payments for our customers and business partners,” says Noel.

“In our journey to building our business model innovation platform, we entered into a relationship with Zuora and clearly we found a partnership in that relationship. Through value assessment, we’ve identified the top line gains and bottom line savings that we could achieve as a company if we moved our business model towards subscriptions,” says Noel. And now, partnering with Zuora, ALE is realizing these new business models, and reaping the rewards.