Service delivery in the cloud: why flexible billing is key

From reduced cost and enhanced flexibility to the immense computing power available on demand, the benefits of adopting cloud technologies are now firmly imprinted on businesses across the board.

The latest market figures reflect rapid growth rates among cloud solutions of all types. According to IDC, public cloud spending will grow by 25% in 2015 to reach a staggering $21 billion, while total worldwide cloud spend for 2015 is estimated at $32 billion, up 28% on 2014's $26.4 billion.

Cloud certainly can be a driver of innovation, offering less expensive technology options and rapid evolution of new products and services. It can also be a key component in the ongoing march towards subscriptions which businesses are increasingly buying in a bid to achieve recurring revenues, enhanced customer engagement and loyalty over the long term.

>See also: The great IT myth: is cloud really less secure than on-premise?

The truth is, however, that while these kinds of benefits are achievable by providers and customers alike, they are far from a given. Fuelled by over promises, misguided assumptions and raised expectations driven by consumer experience, many today believe that cloud is a universal remedy, that switching over and swapping services is straightforward, and that all this is readily available now on demand.

Unfortunately, the reality is different. These ‘nirvana’ conditions remain out of reach for many businesses. To deliver optimum value for customers, cloud implementations should be able to provide scalability, elasticity and support on demand usage, pay-per-use and a wide range of different pricing and payment models tailored to the needs of different customers.

Putting together payment and pricing packages

To deliver cost-effective services, providers must link pricing to value. They must put in the time and effort required to get to know a range of different pricing tools from freemium and bundling to pre-pay and pay-per-use, and put together a flexible pricing toolkit.

While most consumers are happy to pay a standard price for a standard product, business customers will typically want to negotiate a better price and will invariably look for a service to be tailored to their needs in some way.  So, understanding its customer segments and having a flexible way of pricing products and services is crucial for any organisation to effectively address customer needs.

But it’s as much about payment approaches as it is about pricing models. Depending on business focus and customer mix, the business will also need to decide whether it wants to enable its customers to pay by automated methods, such as direct debit and continuous payment authority, or other offline methods such as bank transfer and cheque. It’ll also need to think about whether to offer a choice of when customers pay – should it be annually in advance, or more frequently such as bi-annually, quarterly or monthly?

Offering this level of choice enables businesses to streamline the receipt of payments into the business, makes recurring payments easier to process and improves cash flow. They’ll also need to put in place the right systems to enable this kind of recurring revenue management, though, bearing in mind the top priority should always be to make the process as simple as possible for customers.

Billing in the cloud

But while innovation, particularly in the way services are priced and packaged and the payment models applied to them, is key to growth, unfortunately it’s not the only consideration.

No matter how creative and innovative, a business can be held back by key back office processes such as billing. Traditional on-premise billing systems are often too expensive or lack the agility needed to handle the demands of a fast-evolving subscription business.

>See also: 6 considerations when moving to cloud

This is where cloud technology can come into its own. Cloud billing delivers the agility organisations need to monetise new ideas without major overheads. This flexibility enables constant innovation over the long term and sustained value as a business expands. It also helps make it as easy as possible for customers to engage with a business and spend money with them.

So where in the past billing has proved to be a barrier to progress, now it is being used to enable innovation, to make the changes needed to quickly respond to shifting markets and to maintain leading market status, even when competitors are biting at the heels.

It’s rarely a lack of creativity or innovation that holds organisations back; it’s an inability to act quickly and responsively. That’s where providing flexible pricing and billing is key and where cloud technology can be critically important in making it happen.


Sourced from Louis Hall, CEO, Cerillion Technologies

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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