The race to the cloud continues. With businesses continuing the transition to cloud computing, IT vendors are positioning themselves at the cutting-edge of what remains one of the industry’s hottest topics.

Cloud billing is the latest area to experience dynamic growth. Yet, all the time, it is getting harder for buyers to cut through the hype and understand the term accurately. Is a cloud billing system one that bills for cloud services, or a billing system located in the cloud?

To some vendors, it doesn’t seem to matter. Just put “cloud” in the product name and voilà, they have a ‘cloud billing’ system. But this drive by businesses to be seen as ‘cloud-based’, even when they’re not, is creating potentially damaging confusion in the marketplace. What the industry needs is consistency and clarity so that buyers understand what they are getting themselves into.

A true cloud billing system doesn’t just reside in the cloud (although that is a requirement), it must also be designed as a cloud application, and it must, of course, be able to bill for cloud services.

Billing systems are software applications, and therefore cloud billing is ultimately a specific type of Software-as-a-Service (SaaS), sometimes referred to as Billing-as-a-Service.

Shared Benefits

The SaaS approach as delivered in true cloud billing solutions takes the form of a multi-tenanted application hosted securely in a public, private or hybrid cloud. Businesses can choose the deployment approach that suits them best. All three are viable options but the latter two, in particular, offer organisations the flexibility to change their business model and do more bespoke integration.

It typically takes several months, or even years, an army of consultants and significant investment to implement, configure and integrate a traditional on-premise billing system with other existing applications, let alone derive any business benefits from it. With a true cloud billing solution, however, implementation should be a matter of days or weeks and does not necessitate a large upfront investment.

Equally, most of the work can be done in-house and organisations need only start paying for the application when they begin using it commercially. Critically, if you are a business operating in start-up mode, you can achieve your goals without the cost burden or risk associated with a lengthy integration programme.

As with any SaaS application, businesses investing in a true cloud billing approach do not need to buy hardware or pay separately for capacity. Instead, it is all part of the service.

With a true cloud billing application, organisations benefit from being able to automatically receive new features and enhancements as part of regular software update cycles, usually delivered once a month.

This incremental approach helps drive business agility – in contrast to the 12-month or more release cycles associated with on-premise enterprise solutions and the subsequent large upgrade projects needed to move from one version to another.

With on-premise enterprise software, vendors also often hide behind protracted roadmaps. They can talk about features that are not available today but reportedly will be by the time the customer needs them. With a true cloud billing approach, there is more transparency. In the SaaS space, there are still roadmaps for the future but the immediacy of implementation means that the features are either there or not.

A genuine cloud billing solution supports regular updates that can be delivered to all users of that system, but there is flexibility built in here also. Businesses can choose to use the features that are right for them as opposed to being forced to take on functionality. And they can decide to turn capabilities off and on as required.

Each customer can configure their own specific business rules and processes, but there’s no core software customisation. In other words, the customer stays in control of the upgrade path. Also, because the cloud application is being continuously updated, there is no chance of getting stuck with an end-of-life product.

At the same time, there is flexibility in terms of how organisations acquire and pay for solutions and they are scalable to meet shifts in business demand. With a true cloud billing solution, organisations can also sign up online for a free trial without any commitment to use.

Clearing The Confusion

The benefits of true cloud billing solutions may be obvious but how can the industry clear up the confusion that is preventing the market from realising its full potential? To an extent, it is the term ‘cloud billing’ itself that is at the heart of the problem, with much of the market unsure whether this means “billing in the cloud” or “billing for the cloud”.

The answer is, of course, they should be billing in the cloud with a genuine Software-as-a-Service application that allows them to bill for any digital and non-digital services. So for clarity, it would make more sense for the industry to start talking about SaaS billing applications or Billing-as-a-Service rather than cloud billing. For the time being, however, if organisations are looking for a ‘cloud billing’ solution they need to beware of imitations and be sure that both buyer and seller are talking the same language.

This is a market that has huge potential. If the industry can find a way of cutting through the confusion that surrounds it, the chances of that potential being realised will be significantly enhanced.