And now… billing as a service

Why stop at SaaS, PaaS and IaaS? Take the concept even further, and introduce billing in the cloud, argues Louis Hall

From the street-corner entrepreneur to the largest conglomerates, today all are vying for recurring business from existing customers to gain a more predictable revenue stream based on subscriptions, and create a more valuable supplier-customer relationship.

However, increasing competition means that subscriptions alone are no longer enough. The economy of tomorrow requires the flexibility to mix and match subscriptions with sophisticated use-based pricing models. It also necessitates the ability to manage complex enterprise hierarchies and package offerings that address the phenomenal breadth and depth of consumer and corporate needs.

This kind of flexibility is now accessible to all through a new generation of cloud billing systems, and this is creating opportunities for the channel.

Billing systems are software applications, and cloud billing systems are a specific type of SaaS, sometimes referred to as billing-as-a-service. The SaaS approach, as delivered in true cloud billing solutions, takes the form of a multi-tenanted application hosted securely in a public, private or hybrid cloud.

Businesses choose the approach that suits them best. All three cloud models are viable, but the latter two in particular offer customer organisations the flexibility to change their business model and do more bespoke integration, which enables them to take more effective advantage of the new service-based economy.

With a true cloud billing set-up, implementation takes typically a matter of days or weeks and does not require a large upfront investment. Most of the implementation can be done in-house and organisations need start paying for the application only once it is being used.

Equally, customer businesses investing in true cloud billing should not need to buy any hardware or pay separately for the hardware capacity. That should all be part of the service.

With cloud billing, all organisations should also receive new features and enhancements automatically as part of regular software updates. This can assist business agility.

Companies can choose to use the features they want, instead of having to take on functionality that might change the way they run their business. And they may be able to decide to turn capabilities off and on as required.

Each customer can set up specific business rules and processes but there is no core software customisation. The customer can remain in control of the upgrade path. At the same time, there is flexibility in terms of how organisations acquire and pay for their billing system and they can be scaled up or down to meet peaks and troughs in demand.

With a true cloud billing service, organisations should also be able to sign up online for a free trial without having to commit. Equally, the commercial model is based on what is used, rather than on upfront software licensing or prohibitive implementation fees.

Resellers of enterprise applications and hosting services can easily add billing-as-a-service to their portfolios with little or no upfront investment. It can enable businesses in any industry sector to help their customers differentiate themselves through more flexible billing and pricing options.

Billing as-a-service vendors can further broaden the opportunity by allowing their channel partners to offer white-labelling of their product offerings
and therefore enhance the commercial opportunity as a result.

In my experience, cloud billing is a fast-growing area, bringing a wide range of benefits both to vendors and their business customers. And these benefits are likely to increase over time as the market continues to mature.

Louis Hall is chief executive of Cerillion Technologies