Cloud Based Billing Vs Cloud Driven Billing

Building a case for the Cloud is extremely easy. I can list 10 different elements of the Cloud that make it the best thing since sliced bread!

The SaaS model has truly revolutionized the way software is being used. Convenient, hosted on the now Cloud, without the need for IT or Hardware and so many more advantages. So what is Cloud Based Billing? A recent piece by Gigaom helps find out why Cloud billing is beneficial and how it helps vendors move all aspects of a paper based system to the Cloud. But isn’t that old technology? Isn’t that about generating a PDF file and sending to to your customers instead of a printed invoice? Perhaps not. Perhaps this is about a billing system that works for the SaaS software, charges customers online and they can pay online. Perfect! This is turning out to be good. Some of the items references in the research report talk about

• Why Cloud Based Billing Works
• How costs play a part in Subscription?
• Why Security is Important.
• Provide value through Cloud Billing.
• and some other informative and interesting points

I actually think it’s going to be an interesting report.

Let’s move on a completely different world now. Let’s assume the subscription economy is now working with full fervor and revenues are being generated like no tomorrow. Let’s also assume that for vendors and service providers, the constant revenue stream is proving to be a good cash flow engine with a steady stream of much needed operational and profit dollars coming in. Life is good.

Fats forward to a few years and take a peek at the vast number of providers who have all jumped into the subscription economy and the entire system is driven by the price point. The lower the price, the more customers that jump on to you. As an analogy take a look at the modern publishing industry. Magazine sales are driven through multiple models, including book store sales, but a majority of them through subscriptions. In fact if you look at any recent news article you will find that now (2014) magazine sales are tanking, a major portion of which includes subscription sales, and that’s exactly where the Cloud subscription economy is perpetually heading.

As the much needed panache to the problem that is definitely going to happen, consider a Cloud Driven Billing model. This model actually works on the basis of an actual consumption of services rather than a flat rate subscription. Yes of course with the current subscription models there definitely is a way to charge in blocks, but what if your SaaS usage was completely flexible and offered to charge you in real time for resources you consumed in real time.

As an example, if you were using a self-serviced business intelligent platform powered by this model, you would be charged on the basis of how much data you consumed, or generated or worked with. Name it the way you like. Your billing model could also adapt to your usage and perhaps also charge customers based on the time of usage, the type of data used and so much more.

Yes it’s complex, but works both for the vendor as well as the consumer. The pricing wars then become more focused on driving more value and not just amount of SaaS resources used. This is the model of tomorrow.

This is how Cloud based revenues will be generated and how resources are going to be consumed. A true Cloud driven billing model!

This post first appeared on the Solgenia Blog at www.solgenia.com/blog