Here at Flexiant we are happy to accept challenges. Recently we were challenged to perform a live install and configuration of Flexiant Cloud Orchestrator in an IBM SoftLayer datacenter. As you will read and see in the short video, this task was accomplished in around 40 minutes. Why is this important?
When it comes to billing for cloud services, it’s a tricky business. Sometimes complexity can take over causing services to not be billed for correctly. And as we all know, if you are not billing properly, you are most likely losing money or customers.
In our first of the summer series on the Cloud Blog of the Week, we feature David Linthicum’s ‘You’re paying too much for the cloud’. In it he writes:
You can’t go a month without hearing about some price drop by a major cloud computing provider, with others quickly following suit. Though it seems like a race to the bottom, in fact the cloud providers are starting to make real money.
This race to the bottom is something we’ve been warning service providers about for fear of cloud services turning into a pure commodity in the grand scheme of IT purchasing decisions. This initial paragraph came to me as a warning – cloud service providers take note – it’s not a race to the bottom! Just like you’ll pay more for a steak dinner when it comes with a memorable (for the right reasons) experience i.e. a nice restaurant atmosphere, wine and great service (the value-add), the same holds true for cloud services. Service providers must offer that fine dining experience by adding services on top of the IaaS layer so that customers see the value and do not just opt for the cheaper cloud or experience.
When it comes to cloud billing, identifying the best option to offer your customers can be quite a head scratcher. As a service provider, you need payment for the services you provide (obviously!), and at the same time, you want your customers to have a clear understanding of what they receive in return for payment.
Simple enough I hear you say, but in reality service providers are not in a position to offer such simple cloud billing solutions because it is a much more complicated and expensive process to solve on your own.
During a recent cloud service market survey conducted by us, initial results show that 70% of the respondents are offering their customers self-service provisioning. Though this is an important capability, some 63% of respondents stated that two such important capabilities to offer their customers in the future would be granular metering and granular billing.
But why wait to offer granular metering and billing, when a cloud orchestration solution that incorporates this functionality and self-service provisioning can do the job right now? Cloud customers expect real-time billing, instant sign-up and their bill to be comprehensive, so they can see, line-by-line, what has been used and in what capacity. At the same time cloud providers expect their billing systems to work at scale, instantly reflect new products or promotions, and be up-and-running as quickly as the service itself. Both of these expectations can be met with cloud orchestration.
For the service provider, cloud orchestration can offer:
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.