My colleague Professor @finegold is currently putting in the hours defining exactly what we mean by the ‘Cloud’ billing. The range of definitions is vast – from basic subscription models for SMEs to what could be termed Managed Services.
In amongst the foggy advertising and promotion I believe we are seeing the appearance of the next wave of cloud billers. The complexity of telecoms billing which our vendors take for granted are immensely valuable to a host of other industries and there is a huge opportunity for them to move in. Cerillion, for instance, has just launched its cloud – Billing as a Service – offering, which was 18 months in the making and incorporates all that is good – and difficult – about on-premise billing. Not only does a new service such as this open doors for companies like Cerillion in other industries, it opens new doors within the telco world as well. The functionality that they can offer to other industries will potentially wipe the floor with the competition.
We in the telecoms world sometimes forget that what we do is pretty cool. We can pro-rate, re-rate, offer one-off special offers, take care of tax and local currencies, offer bundles and discounts and rate a zillion transactions a second. In fact, conversations with people from other industries sometimes come close to embarrassing. One such was whether a telecoms cloud offering could rate 8,000 transactions. A second? No, a day.
There is a place for almost all types of cloud billers, as the world – both digital and physical – becomes service orientated not product orientated. That will become the way that companies ‘buy’ the infrastructure that supports their businesses – they will lease it, or rent it, whether they are start-ups or massive telcos in China.
One thought, of course, is whether vendors who launch cloud offerings are in danger of cutting their own throats. On the face of it you would think ‘well, why would their customers pay licenses and maintenance fees when they could pay per transaction?’ The answer is that having invested in the on-premises solution they are not about to write it off immediately. Like all support systems, leave them alone if they are working. Then, in three years time when the world has changed and therefore the systems need to be changed, there is the cloud solution from their preferred vendor. Every company, every three years should re-invent their offerings anyway.
And in the meantime every company on earth that requires slightly complex billing capabilities will be their customers as well.
Good article, Alex. One point to add. Whether it’s on-premise or Billing as a Service (SaaS-based Biller), what service providers want is the flexibility and agility from their billing system to configure (not code) and support new services or change to existing business models in 60-90 days. Every billing vendor says these on their marketing materials but only few actually delivered this capability in a cost-effective way. (You and I know how much AT&T, Sprint spend on average to generate invoices and who their billing vendor is.)
On the other hand, most SaaS Billers are still in their infant stage. They have cost advantage but many still can’t do re-rating, continuous billing, amendments, and settlement as you talked about in this post. Maybe it will take 5 years to close the gaps.