|By Mohammed Sha||
|July 5, 2011 08:00 AM EDT||
For as much buzz as cloud computing is generating in the telecom industry these days, it has created an equal number of questions. Many of these have to do with the complex and demanding application of cloud in relation to business support systems. The following are seven questions regarding cloud billing that my colleague, Fiona Fulton, and I addressed during a webinar (Billing Brightens in the Cloud) and follow up podcast conducted with TM Forum.
1. Is Cloud really being adopted by operators around the world?
The short answer to this is, absolutely. While cloud may not be seeing the traction of some forms of technology, like 4G, it has outpaced others, like fixed mobile convergence. There has been a lot of attention paid to cloud and many major telecom operators – including Deutsche Telekom, AT&T, Verizon, British Telecom, and France Telecom, to name a few – have already rolled out cloud-based service offerings. It may have taken a while for this particular cloud to rain down, but it is certainly being adopted.
2. What’s the difference between the existing billing system and billing in private cloud?
This is a question we get asked quite a lot. It might be helpful to first explain the difference between private and public cloud. A private cloud is really a dedicated cloud environment for a single enterprise. They have complete control over that resource, and it’s theirs to do with as they wish. A public cloud is a cloud resource that’s shared between all paying users. Because of the shared nature of the public cloud it is more difficult to demand certain levels of latency and availability and discuss SLAs with your provider. This is why people don’t think that public cloud is going to be used for billing services. While this may be true today, I think we may see that opinion change as we move into the future and cloud technology advances.
As for the difference between existing billing systems and billing in a private cloud, it really comes down to the way you’re deploying the system. In an existing billing system, you deploy on dedicated hardware. In a private cloud environment you’re going to deploy in a virtualized environment. By deploying in the cloud, what you are really doing is maximizing the use of your hardware resources. This virtualization layer allows you to do lots of things with dynamic management and the dynamic allocation of resources, which helps maximize the use of your resource and drives down your costs.
3. Do cloud services really need sophisticated billing models?
Yes. If you look at the consumer business models that we might see for cloud, they seem very simplistic on the surface, and there’s a good reason for that. Consumers don’t like things to be complicated. When they don’t understand what they are paying for, they get frustrated and start to call customer care. But behind the scenes there needs to be a higher degree of sophistication. Certainly at the consumer level billing systems will need to be able to seamlessly facilitate complex service bundles. The SLA and QoS requirements of the wholesale and partnership models will also give way to enhanced sophistication. Basically, you’re going to see the same levels of sophistication that telco’s have built up in their traditional service being applied to cloud.
4. Margins are expected to be tight for cloud. The more flexibility we build into the billing systems, the more operations cost we have and the lower the margins become. Yet, you strongly suggest telcos run out and grab a share of this market. Why?
This is a very, very good question, and one not just specific to this opportunity. Any venture comes with its own set of risks. The only thing that does not have any risk is doing nothing. Most businesses would rather be active and take the risk to build a strong positioning than sit idle.
In cloud, just as in other opportunities such as M2M, the margins are extremely low and the revenue opportunity is limited. However to be a player in the market, you have to have a sound portfolio of offerings for two reasons: 1) to establish and secure your competitive positioning within the market; and 2) to add a level of “stickiness” to your offerings. Specifically for the SMB and enterprise sector, it’s important to have really strong and appealing offerings. Indeed, you will have the challenge of balancing that strategic positioning with tight margins and the need to maintain low costs, but you can combat these issues by finding relevant solutions and infrastructure deployment models that are able to help you achieve a decent margin.
5. How will different systems like mediation, CRM, and billing interact in the cloud environment? Do all systems need to be deployed in the same cloud?
These systems are going to have to continue to interact in the same way they do today. Cloud is not about recreating the application it’s about deploying it in a different way. Whether systems need to be deployed in the same cloud really comes down to factors such as latency, availability and security. If you look at a tightly coupled system like mediation and a rating engine, for example, the latency and the need for communication is very tight. You can’t have a 10 second delay between those two systems. So, it really comes down to your own cloud infrastructure to determine whether or not you can deploy these systems in different clouds. Will your latency be good enough? Will your ability to communicate between systems be good enough? In many cases, the answer may be, no. But, if you look at something like CRM, where the communication isn’t so immediate, it’s much more feasible that this system could be sitting somewhere else. It really comes down to the organization to look at the cloud infrastructure it has in place to see what’s possible within that infrastructure.
6. How can offering cloud services reduce customer churn?
By offering cloud-based services telcos stand a very good chance of improving revenues. However, as I stated before, margins will be small and the revenue benefit is going to be limited. The significant benefit of offering cloud services will be seen in improved brand positioning within the target market, and this will have a considerable impact on reducing churn. Just as triple- or quad-play offerings have a higher rate of customer retention when compared to the individual service offerings, operators who include cloud-based services in their portfolios will have an edge with a new bundling opportunity to provide SaaS access alongside their telecommunications services. The bundling effect would help customer stickiness for the traditional services whilst increasing revenue from the cloud services.
7. Is there any implication of cloud on mergers and acquisitions in the telecom sector?
Actually, I think cloud should actually enable smoother mergers when compared to non-cloud infrastructures. It should be easier to move subscribers of one company to the other’s systems residing in cloud, because these cloud-based systems are not only scalable, but they also provide open interfacing technologies that allow easy access to data enabling migration. On the other hand, non-cloud-based systems force the acquirer to maintain the two subscriber bases separate for a considerable amount of time, which leads to long delays in realizing the benefits of these acquisitions.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively.
Oct. 9, 2015 06:15 AM EDT
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Oct. 9, 2015 06:00 AM EDT Reads: 283
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
Oct. 9, 2015 06:00 AM EDT Reads: 1,397
Achim Weiss is Chief Executive Officer and co-founder of ProfitBricks. In 1995, he broke off his studies to co-found the web hosting company "Schlund+Partner." The company "Schlund+Partner" later became the 1&1 web hosting product line. From 1995 to 2008, he was the technical director for several important projects: the largest web hosting platform in the world, the second largest DSL platform, a video on-demand delivery network, the largest eMail backend in Europe, and a universal billing syste...
Oct. 9, 2015 05:45 AM EDT
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. Migration to cloud shifts computing resources from your data center, which can yield significant advantages provided that the cloud vendor an offer enterprise-grade quality for your application.
Oct. 9, 2015 05:30 AM EDT Reads: 247
The IoT is upon us, but today’s databases, built on 30-year-old math, require multiple platforms to create a single solution. Data demands of the IoT require Big Data systems that can handle ingest, transactions and analytics concurrently adapting to varied situations as they occur, with speed at scale. In his session at @ThingsExpo, Chad Jones, chief strategy officer at Deep Information Sciences, will look differently at IoT data so enterprises can fully leverage their IoT potential. He’ll sha...
Oct. 9, 2015 05:15 AM EDT Reads: 506
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi's VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driv...
Oct. 9, 2015 05:15 AM EDT
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...
Oct. 9, 2015 05:00 AM EDT Reads: 1,009
The modern software development landscape consists of best practices and tools that allow teams to deliver software in a near-continuous manner. By adopting a culture of automation, measurement and sharing, the time to ship code has been greatly reduced, allowing for shorter release cycles and quicker feedback from customers and users. Still, with all of these tools and methods, how can teams stay on top of what is taking place across their infrastructure and codebase? Hopping between services a...
Oct. 9, 2015 05:00 AM EDT Reads: 491
As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ability. Many are unable to effectively engage and inspire, creating forward momentum in the direction of desired change. Renowned for its approach to leadership and emphasis on their people, organizations increasingly look to our military for insight into these challenges.
Oct. 9, 2015 04:45 AM EDT Reads: 101
DevOps and Continuous Delivery software provider XebiaLabs has announced it has been selected to join the Amazon Web Services (AWS) DevOps Competency partner program. The program is designed to highlight software vendors like XebiaLabs who have demonstrated technical expertise and proven customer success in DevOps and specialized solution areas like Continuous Delivery. DevOps Competency Partners provide solutions to, or have deep experience working with AWS users and other businesses to help t...
Oct. 9, 2015 04:00 AM EDT Reads: 219
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
Oct. 9, 2015 04:00 AM EDT Reads: 567
Overgrown applications have given way to modular applications, driven by the need to break larger problems into smaller problems. Similarly large monolithic development processes have been forced to be broken into smaller agile development cycles. Looking at trends in software development, microservices architectures meet the same demands. Additional benefits of microservices architectures are compartmentalization and a limited impact of service failure versus a complete software malfunction....
Oct. 9, 2015 04:00 AM EDT Reads: 222
Containers are changing the security landscape for software development and deployment. As with any security solutions, security approaches that work for developers, operations personnel and security professionals is a requirement. In his session at @DevOpsSummit, Kevin Gilpin, CTO and Co-Founder of Conjur, will discuss various security considerations for container-based infrastructure and related DevOps workflows.
Oct. 9, 2015 04:00 AM EDT Reads: 232
The cloud has reached mainstream IT. Those 18.7 million data centers out there (server closets to corporate data centers to colocation deployments) are moving to the cloud. In his session at 17th Cloud Expo, Achim Weiss, CEO & co-founder of ProfitBricks, will share how two companies – one in the U.S. and one in Germany – are achieving their goals with cloud infrastructure. More than a case study, he will share the details of how they prioritized their cloud computing infrastructure deployments ...
Oct. 9, 2015 03:00 AM EDT Reads: 738
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
Oct. 9, 2015 03:00 AM EDT Reads: 291
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
Oct. 9, 2015 02:00 AM EDT Reads: 880
Between the compelling mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how busine...
Oct. 9, 2015 02:00 AM EDT Reads: 286
Interested in leveraging automation technologies and a cloud architecture to make developers more productive? Learn how PaaS can benefit your organization to help you streamline your application development, allow you to use existing infrastructure and improve operational efficiencies. Begin charting your path to PaaS with OpenShift Enterprise.
Oct. 9, 2015 02:00 AM EDT Reads: 557
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Oct. 9, 2015 02:00 AM EDT Reads: 2,215