Cloud Billing: Is Simpler Better? The Debate Rages On

Written by on June 26, 2013 in BillingViews, Opinion with 0 Comments

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The Cloud that Billing now inhabits is a funnel cloud; spinning fast, throwing debris about, and creating chaos. The debate over simplicity versus sophistication resurfaces constantly, and there’s no right answer. The traditional telco folks will argue that you can’t run today’s communications businesses on something that mostly bills for flat rate subscriptions and provides basic payment options. The guys entering the comms billing space from other industries will argue that it’s time to stop over-engineering the billing process because it creates more problems, and costs, than it fixes. So, what’s the right answer?

Anytime I’m faced with this question of whether complexity is necessary, I come back to IMS as a case study. The Bellheads swore that you couldn’t deliver orchestrated, multi-domain services without this incredibly complex, new signaling infrastructure. Then the iPhone, Skype, and YouTube proved that to be completely wrong. IMS faded mostly into the background after a brief period in the spotlight. The object lesson here isn’t that complexity is never required, but rather that sometimes really smart engineers can make solutions far more complicated than they really need to be. That said, sometimes complex solutions are absolutely required. The Saturn V rockets that flew humans to the moon are a testament to that fact.

The important question for any service provider trying to choose between a simple or complex Cloud Billing path is: what are you trying to accomplish? If you want to charge $8 (or £8, or €8) per month for a digital video rental service you deliver to as many people as you can, like Netflix does, then you don’t need much in the way of billing sophistication. You might want some behavioral analytics that help you improve your customer experience by making smart recommendations for future rentals – that’s another discussion. But as long as you can bill your flat recurring charge consistently and let someone pay for it with credit, debit, or gift cards; PayPal; or direct debit from a bank account; you pretty much have what you need – so long as the solution you choose can scale to support millions of customers, which is easier to do with a simpler solution.

Now, if your business goes well beyond the Netflix model, and encompasses, for example, custom-priced M2M solutions that are billed on a per-transaction basis and require significant billing detail across millions of autonomous, connected devices…you need something with a little more engineering punch. Frankly, you also need more engineering punch if you’re doing anything cross currency; test marketing variable pricing across different geographic markets; migrating customers from legacy to next-gen products; or any number of other multi-variable activities a telecom operator might be taking on at a given time.

Finally, product management can be a major difference maker. If you have simple, subscription based products or services that only incur flat, one-time charges, you might get away with a simple, low cost cloud biller – assuming you never intend to make your business any more complex than that. But, as soon as you get into a broader range of products that might each have multiple instances; variable bundling; regional variations in offerings; or a greater need for packaging, discounting, and cross-promoting, you’re going to need a solid to superb product catalog. Too often that’s what the pure cloud billers lack. While you don’t want a product catalog that is so complex it restrains product introduction, you won’t be able to live with a product catalog that thinks product definition is little more than a name, a description, and a price.

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About the Author

About the Author: Ed Finegold is CSO for Validas, a company that specializes in personalized user experiences that leverage analytics-as-a-service to simplify mobile buying, selling, pricing & billing. Ed has been a regular contributor to BillingViews. .


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