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SaaS Authors: Elizabeth White, Liz McMillan, Pat Romanski, Mehdi Daoudi, Rajeev Gupta

Related Topics: Cloud Computing, SaaS Journal, Microservices Journal

Blog Post

Cloud-Based Billing vs Cloud-Driven Billing By @IanKhanLive | @CloudExpo [#Cloud]

The SaaS model has truly revolutionized the way software is being used

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 explain 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 it 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 referenced 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 other informative and interesting points

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

Let's move on to 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.

Fast forward a few years and take a peek at the vast number of providers that 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.

For 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 anyway 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 it works both for the vendor as well as the consumer. The pricing wars then become more focused on driving more value and not just the 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 article first appeared on the Solgenia Blog at www.solgenia.com/blog

More Stories By Ian Khan

CNN Futurist, Forbes Contributor, Author, 3 Time TEDx Speaker and Technology Futurist, over the last 20 years Ian Khan has had the privilege to serve the needs of over 5000 organizations by fueling their growth through technology solutions. He has helped a diverse set of businesses ranging from Technology Companies, Oil Companies, Power Generation & Renewables Operators, Microsoft Ecosystem Partners, SAP Customers and Partners, Healthcare Providers, Manufacturers, Facility Operators, Startups, Educational Institutions, Nonprofits & associations and more. Ian’s experiences with these organizations led him to a unique position of being able to identify the common challenges of growth for all these organizations. The bottom line as he found out, is that we all are hungry for success and want to grow and make a difference. Where we fall short is by failing to understand our environment and taking the right action within that environment. After 20 years serving the needs of the industry Ian’s natural pivot was to answer his calling and help organizations at a broader level understand what tomorrow brings. His work and study of all these organizations brought forward very unique perspectives that he now share through his work. Today, hands down, we live in the great time for humanity. Technology is a great thing, but it also has its victims. Many organizations of tomorrow will fail under the pressure of a fast changing world, much of which is fueled and driven by technology. Ian’s mission is to help organizations avoid that pitfall, and propel themselves into success in today’s era and go from digital disruption to digital transformation in the fastest and most sustainable way. This is the only way, according to him, we can together create limitless value, create solutions that are faced by us locally as well as by others around the globe, and make the world a happier place. Today Ian’s work spans working with people by delivering keynotes, consulting and by promoting his 7 –Axioms methodology through his book and workshops. He is also working on an ambitious project of releasing a documentary in spring of 2018 called Industry 4.0. Industry 4.0 will capture the thoughts and insights of some of the world’s leading thinkers and help us understand the 4th Industrial Revolution, Its Impact, and how we can all be have an opportunity to be part of the emerging future and make the right choices. For more information please visit www.iankhan.com

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