Now It’s BaaS – We May Never Be the Same Again

Direct operator billing (DOB) is seen as one of the saviours for CSPs in their battle to gain the hearts and minds of digital service providers (DSPs). This is based on the premise that CSPs can do billing better and more efficiently than anybody else and that they can give DSPs access to the vast prepaid market being controlled by them.

Of course, the very big DSPs control their own billing process, but there will come a time when they will need to speed past the limitations of only having customers with bank accounts and cards.

Not all CSPs see the need to open up their billing assets to third parties or have any desire to invest in making their systems applicable to over the top players. There seems to be a gap opening up in the market for ‘billing as a service’ (BaaS), catering to second and third tier DSPs and CSPs not wanting to invest further in their in-house systems.

Back in 2001, three foolhardy entrepreneurs (including this writer), with the help of venture capital, embarked on a journey to create an online billing portal or application service provider (ASP) as they were known then. Copernicus Global Billing Services specifically targeted virtual network operators, both mobile and fixed, and resellers that were flourishing at the height of the dotcom boom.

Almost everyone wanted to resell communications products to enhance their own lines of business. Retailers, grocers and utility companies were right out there but they had no means of billing for the complexities of telephony and, with tight margins, could ill afford using their host network’s billing infrastructure. The time was truly ripe for BaaS.

Sadly, there were very few existing convergent billing platforms that lent themselves to the white-labelled, fully online, highly agile environment being demanded. That’s why Copernicus ended up developing the whole platform from scratch, but by the time it was launched with three customers on board the dotcom boom busted and so did the dreams and aspirations not only of the Copernicus team but the reseller market as whole.

The whole concept of BaaS may just have been too early or was simply the victim of bad timing, but since then others have aspired to offer similar services with mixed results. Today, however, the billing market seems buoyant again, not just with resellers of telephony services but with DSPs offering their goods over the internet direct to customers. They are not interested in investing in big bang billing infrastructure and may not be suitable as DOB customers.

One existing billing vendor, Cerillion, saw this market coming 18 months ago and invested heavily in developing what it describes as billing “designed specifically for the cloud, but built on more than 20 years’ experience delivering high performance on-premise billing and transaction processing systems.”

Cerillion Skyline is touted as a powerful multi-tenanted Software-as-a-Service (SaaS) billing application for the next generation of subscription and usage-based services, and my own detailed analysis of it supports the claims. It is dead easy to set up, very easy to use, is agile in terms of speed to launch new services and products and collect payment for them and above all, it is priced very attractively.

No, this is not an advertisement for the company or the product, but it does highlight yet again that our industry is undergoing another big change. There is no reason an existing CSP could not offer a white-branded online DOB option to customers based on existing in-house systems, but if that is too daunting or too expensive, a third-party option like Skyline might be the answer for them, too.

On the other hand, if they can access all the features of telco billing in an easy-to-use package, why would DSPs even bother to opt for DOB. Ah, yes, the CSPs have that elusive prepaid market to offer. Let’s not get too complacent, our ‘friends’ at Visa and MasterCard are only too happy to roll out prepaid debit cards to the masses and these may not only trump the telcos but may open up a significant market to those pesky OTT players and their digital offerings.

Reprinted courtesy of  TM Forum’s Inside Revenue Management Newsletter

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Tony Poulos
About Tony Poulos 48 Articles
Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, been contributing Analyst for IDC, a freelance writer and is a columnist and video anchor for Telecom Asia. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide.

2 Comments

  1. Hi Tony – IMO, BaaS just offers another form of deployment. Customers’ requirements will drive to make the choices between on-prem, hosted, or BaaS. I see lots of tier1/2 CSPs and DSPs come to us and tell us they care most is a system that gives them high level of control and ability to grow and innovate beyond communications to support new digital business models.

    Both on-premise/managed service billers and BaaS system should be built with extreme flexibility and configurability to support simple and sophisticated business models in days, not months. MetraTech built our products based on this principle. Interestingly, our customer, the world largest financial services company, came to a telco tradeshow 6 years ago and told us that they couldn’t find any billing vendors in their verticals nor traditional telco billers to meet their needs. It implies that the “billing transformation” should start from the conventional telco billing vendors, not the operators. 🙂

  2. Tony
    Interesting take. There are others companies including Transverse that like Cerillion have taken the knowledge gained from years of experience in Telco and other vertical billing products and applied them to this area. The systems need to handle not only communication products but also products that are related only to communication services in terms of payment channels. It is here where having a vertical agnostic SaaS application designed from the ground up will truly come to bear fruit IMHO.

    Geoff Coleman

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