Welcome!

@CloudExpo Authors: Liz McMillan, Kong Yang, Elizabeth White, Carmen Gonzalez, Yeshim Deniz

Related Topics: @CloudExpo, Mobile IoT, Containers Expo Blog

@CloudExpo: 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
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Judith Hurwitz is president and CEO of Hurwitz & Associates, a Needham, Mass., research and consulting firm focused on emerging technology, including big data, cognitive computing and governance. She is co-author of the book Cognitive Computing and Big Data Analytics, published in 2015. Her Cloud Expo session, "What Is the Business Imperative for Cognitive Computing?" is scheduled for Wednesday, June 8, at 8:40 a.m. In it, she puts cognitive computing into perspective with its value to the busin...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...