Welcome!

Cloud Expo Authors: Pat Romanski, Liz McMillan, Dana Gardner, Elizabeth White, Carmen Gonzalez

Related Topics: Cloud Expo, Wireless, Virtualization

Cloud Expo: Article

Seven Questions (and Answers) About Cloud Billing for the Telecom Sector

The cloud, sophisticated billing, and the future of telecom's back office

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.

More Stories By Mohammed Sha

Mohammed Sha is the Director of Product Marketing at AsiaInfo-Linkage, the supplier of the world's most advanced software solutions and IT services to the telecommunications industry.

@CloudExpo Stories
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile ...
At 15th Cloud Expo, Shrikant Pattathil, Executive Vice President at Harbinger Systems, demos a video delivery platform that helps you do interactive videos. He discusses how Harbinger is accomplishing it in the cloud world, the problems they faced and the choices they made to get around these problems.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water,...
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, focused on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud platfo...
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by minin...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Between the compelling mockups and specs produced by your analysts and designers, and the resulting application built by your developers, there is a gulf where projects fail, costs spiral out of control, and applications fall short of requirements. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, will present a new approach where business and development users collaborate – each using tools appropriate to their goals and expertise – to build mo...
There is no doubt that Big Data is here and getting bigger every day. Building a Big Data infrastructure today is no easy task. There are an enormous number of choices for database engines and technologies. To make things even more challenging, requirements are getting more sophisticated, and the standard paradigm of supporting historical analytics queries is often just one facet of what is needed. As Big Data growth continues, organizations are demanding real-time access to data, allowing immed...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your o...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect at GE, and Ibrahim Gokcen, who leads GE's advanced IoT analytics, focused on the Internet of Things / Industrial Internet and how to make it operational for business end-users. Learn about the challenges posed by machine and sensor data and how to marry it with enterprise data. They also discussed the tips and tricks to provide the Industrial Internet as an end-user consumable service using Big Data Analytics and Industrial C...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
Log data provides the most granular view into what is happening across your systems, applications, and end users. Logs can show you where the issues are in real-time, and provide a historical trending view over time. Logs give you the whole picture. Logentries, a log management and analytics service built for the cloud, has announced a new integration with Slack, the team communication platform, to enable real-time system and application monitoring. Users of both services can now receive real-...
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
“Will Jaya is a direct source for server integration and storage solutions. If you are looking for any specific configurations for a project we can help you configure based on your needs and requirements," explained Netty Goya, CEO of Will Jaya, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
“The year of the cloud – we have no idea when it's really happening but we think it's happening now. For those technology providers like Zentera that are helping enterprises move to the cloud - it's been fun to watch," noted Mike Loftus, VP Product Management and Marketing at Zentera Systems, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.