Cloud service providers have a nasty habit of focusing on the technology that they offer to their customers without considering how to solve the problems of billing for the technology until after it is in place. At best, this results in a nasty surprise for the accounts department. At worst, it results in the inability to monetize a new product.
One main problem area is when cloud service providers underestimate the likely complexity of their product catalog. They often think they are selling disks, servers and networks, and wonder what is the challenge with having three products. In our experience, very few customers end up with such simple set ups.
Here are five reasons why:
1. Cloud service providers often want to make some products available to some customers, and other products available to other customers. Those might be the same technical products, but sold at different prices or with different billing plans. We support this in Flexiant Cloud Orchestrator by distinguishing between a product and a product offer. Our tagging system allows products to be made available to groups of customers.
2. Whilst some providers are happy with ‘we charge $x per gigabyte per hour’, others offer specific configurations of machine, and have pricing that may not be entirely linear. For instance, some service providers might be happy for the customer to configure any amount of RAM on their virtual machine from 512MB to 16GB, charging at $0.01 per GB per hour; but another might want to offer specific combinations of RAM and CPU, discounting the larger machines appropriately. This increases the size of the product catalog. We can cope with both possibilities by using a system called ‘configured values’, which can be nailed down by the licensee either when the product offers are created, or left to the end user to configure.
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We strongly believe a successful roadmap to offering cloud services involves a great level of integration. You as a service provider will be asked to provide all sorts of services to your customer base, in order to help them get the most out of the new cloud computing consumption model. To get there, you’ll need a solid technology foundation, good knowledge of the market and lots of time to develop integration.
We believe Flexiant Cloud Orchestrator is the foundation layer capable of that robustness, scalability and elasticity that is required to build services that are ready to cope with increasing demand. And on the integration side, we are constantly working to make our platform interoperable with other great technologies, thus making your life much easier, while still having a broad number of choices. Sounds great doesn’t it?
Responding to our customers’ demand, we have incorporated specific integration modules for Hostbill and WHMCS. These two popular customer management, product catalogue and billing systems are generally adopted by service providers that want to offer an online marketplace for all their cloud services, obviously including those delivered by Flexiant Cloud Orchestrator.
If you went to get petrol, you’d expect to only pay for the amount you pumped. Or if you needed to hire food servers for an event and thought you only needed three, you wouldn’t want to hire an additional two to only sit around at the event. Why such random examples? Because both can be applied to cloud computing.
Over the last few weeks, we have talked a lot about billing and metering so I’ll briefly mention this again – why would you pay for anything other than what you’ve used? Service providers must be offering their customers this transparency to see exactly what they are using and only pay for what was used just like when you go to fill up your car.
The second example of hiring food servers presents provisioning challenges. I used the example of hiring servers at an event because once again, we only want to pay for what we’ll use. But in the case of resourcing this can sometimes present issues. You may estimate that you need five servers, but then only need three. Or alternatively, you may only hire three, but then need five. This is a resourcing nightmare and is normally why for an event you hire a venue or event planner with the expertise to resource appropriately not to waste your budget.
Last week we hosted a webinar, The 10 Biggest Metering and Billing Mistakes Cloud Service Providers Make. Below you’ll find a number of questions and answers following the presentation:
On Existing Billing Systems1. If I have an existing billing system, what challenges will I face collecting data and using my existing billing system?
The key is to work out how much of the existing billing system you want to use. Most organizations, unless they are starting a completely new subsidiary, will have at the very least an accounting system. The two back-end processes – production of invoices and credit control – you’ll want to do with the existing system.
You’ll want to make sure that whatever you are using to do the front end billing (which your existing system probably won’t be able to do) is capable of interfacing with the back end. The more modular the system you have and the more layers it interfaces, for instance at the invoice line or the invoice level, you want to make sure you define the interface accurately and can align it those with the existing system.
The webinar ‘The 10 Biggest Metering and Billing Mistakes that Cloud Service Providers Make’ focused on more than 10 aspects of metering and billing that the service provider needs to address including why conventional billing does not work and how to set pricing policy.
A number of important participant questions were asked including:
To hear the answers, watch the on-demand webinar.
One question that was answered after the webinar was “What is the actual granularity that represents ‘real-time’?”. Our response is as follows:
