The potential of the Cloud is clear. So, is there a problem?

The potential of the Cloud is clear. So, is there a problem? Guest blogger Alex Leslie, Publisher of BillingViews, investigates the potential of Cloud Billing and looks at what might be holding back growth in some regions.
 
Leaving aside – for a moment at least – Cloud based puns, it is really quite surprising that Cloud is not already becoming ubiquitous. The arguments for billing for the Cloud, from the Cloud, by the Cloud are compelling. Quick, easy and cheap are some of the best arguments in the book. And yet, there is still reluctance in many quarters.
 
That is why surveys like the Cerillion survey and accompanying white paper and Infographic are as useful as they are. IT professionals from 200 firms across the UK responded to some straightforward questions about their use of the Cloud for billing.
 
Even though take up is not as quick and overwhelming as Cloud evangelists would expect, the survey points to a huge potential. Just four percent currently use it, with eight percent planning to. Another 11 percent use managed services of some kind.
 
So, what is stopping the other 88 percent embracing this new way of testing, trialing and launching new products quickly, cheaply and flexibly?
 
In the UK at least, the answer seems to be inertia.
 
Fully 60 percent said that they were happy with their in-house system. Worryingly – hopefully not for them – 21 percent said they did not have the time to evaluate Cloud billing.
 
Which is fine, but in the near future greater and greater pressure will be brought to bear on the engines that manage pricing. Simple, one-off pricing is fine to start with, but history tells us that complexity and sophistication become the differentiators in competitive markets. This is borne out by the survey. While 84 percent of respondents are using one-off pricing models at present, this figure is set to drop to 51 percent in the not too distant future. This means more sophisticated pricing models, such as pay per use, freemium and subscriptions will emerge. And as they do, systems need to be flexible to support them, and quickly.
 
With the dual pressures of innovation in pricing and the need to cut costs, the arguments for moving to Cloud based business models must stack up. The counter arguments have essentially all disappeared. Security, once the top barrier is only a concern to 15 percent of Cerillion’s survey group and there are some leaders out there who are showing the way.
 
The Sydney Morning Herald recently did a profile of the CIO of Vodafone in Australia who is using the Cloud to test projects cheaply and quickly and is able – as a result – to build a business case as he goes along – as he says, “almost in real-time.” And this happens in conjunction with the Finance department who see the opportunity to monitor investment potential.
 
But we must be clear about the Cloud and its definitions.
 
As Dominic Smith, Marketing Director at Cerillion says, “a Cloud billing system is not just the same old enterprise system installed on an IaaS platform and charged on a monthly basis. This is just hosted billing by a different name.” With true Cloud – a native SaaS application - you avoid the integration costs and headaches and can quickly take advantage of reducing CAPEX, managing OPEX and having the flexibility you need to launch new products and pricing plans.
 
Definitions are important if you are not going to be locked in to a provider who is not going to be as flexible as you first thought. And making sure your Cloud vendor meets your requirements is obviously the key to success.
 
If pricing is going to become more sophisticated, more complex, then surely you need a company that has a background and history of supporting complex pricing models.
 
And let us hope that those 21 percent who are too busy to evaluate Cloud at the moment find some time soon – before it is too late.
 
Visit BillingViews.com for more news, views and comment on the billing industry from Alex Leslie.