Collecting from the cloud

Susana Schwartz
05 Feb 2010

Enterprises want to "escape the box" to attain ubiquitous availability, flexibility in charging, and instant access to leading-edge applications and tools at lower operating costs.

Whether a need for CPUs and storage delivered over networks (infrastructure as a service), or a need for tools and programming for rapid creation of applications (platform as a service), or "shrink-wrapped" applications accessible by a variety of devices (software as a service), or even hybrid solutions that combine elements of private servers with public clouds, it's obvious cloud computing's elastic management of computing power and resources could present huge revenue opportunities for service providers... that is, if they figure out how to bill for cloud services.

The desire for such services is driving leading CSPs (particularly Tier 1s) to send out an unprecedented number of RFIs and RFPs about enterprise billing. According to Amdocs, cloud currently fulfills only 5% of its current market potential of $16 billion. With huge potential for generating revenues, CSPs are evaluating their billing, charging and settlement capabilities.

"What happens is business folks go to IT saying 'we want to resell cloud services,' and IT says 'Okay, maybe in 2012," says Metratech CTO Douglas Zone. "The business folks then look elsewhere, because IT is stuck supporting and enhancing older systems, as getting money for proactive, next-gen systems is hard to come by."

But if IDC predictions this summer hold true, worldwide telecom cloud billing investments could grow to $350 million in 2013 (up from $15 million in 2008).

It seems logical at first glance that telcos would think themselves well positioned to be a one-stop shop for the services businesses want. "For the past 15 years, they have hashed out creative bundling, charging models, monthly pricing plans, prepayments, contracts, bonuses and complex discounting, not to mention security, privacy, settlement and dispute resolution," points out Anthony Behan, global OSS/BSS solution owner for IBM.

Reality check

Despite the expertise and assets they can leverage, CSPs remain cautions about upgrading and integrating existing billing, charging and settlement or BSS revenue management tied to provisioning and partner settlement. They are first considering the business case, as well as the challenges of governance, security, performance and commoditization. Some are starting out with SaaS models (a possible $16 billion market by 2013, according to Gartner), though with loosely coupled partnerships that do not force painful integration or upgrades of BSS components.

How CSPs go about that will depend on their mentality and culture. Service providers historically take a pragmatic approach to anything new. "CSPs aren't known for taking giant leaps of faith, so cloud might be a 'slow burner' that becomes part of a 'wider drift' toward SOA," according to IBM's Behan.


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