IDC Believes Cloud Providers Can Learn from Telecom Service Providers That Rating Does Pay

Leveraging a system to put a value on the transaction -- "rate" in telecom language -- will be a critical first step for cloud computing infrastructure projects.

June 4, 2009

2 Min Read
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FRAMINGHAM, Mass., June 4, 2009 - Monetizing cloud computing services is not going to happen overnight, but cloud providers can gain traction by leveraging the telecommunications industry's proven approach for effectively charging for such services. According to new research from IDC, worldwide telecom cloud billing investments will grow from $15 million in 2008 to $350 million in 2013.

While other industries - banking, IT, logistics, online entertainment, retail and transportation - have sought to build comprehensive and flexible billing platforms, cloud computing players are finding it critical to evaluate these telecommunications billing solutions. Leveraging a system to put a value on the transaction - "rate" in telecom language - will be a critical first step for cloud computing infrastructure projects. Telecom billing vendors like Amdocs, Comverse, Convergys, CSG, Intec, LHS, Oracle, and others include rating as a core component of a holistic billing system, which also includes capabilities such as customer care, partner billing, promotions, and payments and collections. Other telecom billing vendors focus on specific pieces such as rating, mediation, settlement, or revenue assurance. The business and consumer experiences of complex bills for technology services is often tightly associated with voice and, increasingly, data services, thereby making the telecommunications example instructive. A new generation of business and consumer customers mean that cloud providers need to take a critical look at the options.

"The investment in billing systems for cloud computing is drawing upon the rigor, scale, and technology experience of the telecommunications industry," said Elisabeth Rainge, director NGN Operations, IDC. "In examining the existing deals for cloud billing, we identify telecommunications industry expertise as highly relevant."

In addition to providing a key business operations platform, companies aiming at the cloud infrastructure opportunity are recognizing that the ability to develop and maintain a set of pricing plans requires the rating expertise of the telecommunications industry. For example, a fixed line subscriber calling a local number during weekend hours would typically be rated at a lower tariff rate than a roaming mobile user accessing email internationally during peak hours. The kind of subscription -- prepaid, postpaid, data, voice, business, or consumer -- drives a further level of complexity for which the telecommunications industry offers mature and real examples of business processes and systems.

Additional findings from this study include the following:* Two metrics fuel the cost of billing systems: the volume of subscribers and the number of transactions.

* The emerging telecom cloud billing platforms are increasingly smaller and lighter investments, particularly in comparison with legacy telecommunications billing platforms.

* For telecom billing platform vendors to offer compelling solutions to cloud players, they must demonstrate business process agility.

The IDC study, Worldwide Telecom Cloud Billing 2009-2013 Forecast (IDC#217313), presents the worldwide market size and forecast for telecom cloud billing, which is a segment of the telecom billing market. It assesses the suitability of telecom billing solutions for nascent cloud requirements as well as customer and vendor interest in addressing cloud billing requirements from the telecom billing context.

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