When Forbes reports on a quiet, Boardroom led revolution called Agile Billing you have to sit up and pay attention. There is, says the article, a perfect storm of forces at work that is pushing major change across the business. The eternal pressure to reduce cost has not let up, even in the face of an almost equal pressure to improve customer experience, innovate with pricing and launch services in time frames unheard of three years ago.
The philosophical arguments about the Cloud will rumble on for years but the truth is that companies are being forced to use the Cloud to deliver the agility demanded by the Boardroom. Pricing is becoming more sophisticated, moving from one-off pricing to freemium, pay per use and other models. This is according to the recent study and white paper sponsored by Cloud Billing specialist Cerillion. Their research, among 200 UK based IT professionals, found that the percentage of one off pricing models is set to drop from 81 percent to 54 percent in the next year or so.
The twin pressures – innovation and cost control – are forcing some into using the Cloud for some products and services. Others, though, are embracing the whole concept wholeheartedly.
An article in the Sydney Morning Herald tells the story of how Vodafone CIO Andrew Wiles is now regularly using the Cloud to test projects. Unlike the ‘bad old days’, he can now, he says, get small projects off the ground in a matter of days. The speed with which something can be tested means that “you are almost building a business case, based on the benefit that it is going to bring to the customer, in real time.”
For larger projects, too, the Cloud and ‘agile’ development is his route of choice. For him – and for an increasing number of CIOs – the times have already changed. A large software development could take months or even years to get to a feasibility study stage. And then a business case has to be built. One benefit is that the Finance department is actually getting involved in new projects, as the quick deliverable means that such projects are more of a catalyst to see if something is worth investing in.
But there are barriers.
The Cerillion study found that 60 percent of respondents are satisfied that their current in-house system is up to the task. Interestingly, and a little sadly, 21 percent said they were ‘too busy’ to evaluate Cloud billing at the moment. Hopefully – for their sake – that will change quite soon. Innovating with pricing is, at best, hard with inflexible systems.
With the need for agility and the cost pressures, the role of the CIO is changing. Generally, the CIO used to see himself as a provider of IT to the business. Now he sees himself as a business enabler, providing a service to the business, in some cases described as a ‘playground for the business to experiment in.’ To provide that kind of support means a very different and agile approach than the old fashioned methods and time frames.
The issues above – a combination of cost pressure and the need to transform the business into an agile unit – are confirmed by a recent Ovum study. In this study, these issues – in various guises – represent the top half of the list of drivers of Cloud take up. Both Ovum and Cerillion found that, while the use of Cloud is still relatively low, the speed of adoption is speeding up dramatically.
Attitudes and reasons for adoption are changing too. Ovum found that the emphasis is moving from simple cost reduction to ‘leveraging technology for business transformation.’ Such transformation tends to be focused on improving customer experience. Other findings from the Ovum work included a real need for the customer to be completely happy with the security and support supplied, the emergence of hybrid public and private cloud models and a lack of governance and oversight, indicating, perhaps, the lack of maturity in this market.
Cerillion found that industry specific knowledge and excellent customer support were important when companies were choosing providers but that the most important factor was ‘Billing expertise and track record.’ Certainly, there is a difference between the ‘new breed’ of subscription based solutions and those whose pedigree is from companies that have come from a complex billing environment. As pricing moves to more sophisticated models, the dangers of being trapped in an inflexible ‘simple’ subscription solution must be taken into account.
As the communications industry fragments into the smart glue that binds the future of other industries together, the need for speed and agility will become more important. Whether it is the smart car, the smart hospital or the smart home, agility will become ‘table stakes.’ And the importance will only increase as the relationships that communications service providers (CSPs) need to make and support become clear. An obvious example is how OTT players and CSPs interact. Both sides understand that a partnership is beneficial. Cheap or zero rated Facebook and other sponsored data trends will be best supported by a sensible, workable relationship.
The trouble is that agile IT companies such as Google cannot even see what IT will need to support over and above a six-month window. CSPs on the other hand need that much time to scope a project and get to the point of organizing a kick off meeting. The more that CSPs can harness agile methods – and the Cloud – the better able they will be to support these new, incredibly dynamic relationships.
It is a safe bet that Cloud will become the norm in delivering dynamic services and agile billing to a variety of markets. It will be interesting to see, from future studies by Cerillion, Ovum and others, how fast that happens (and whether that 21 percent finds the time to consider the alternatives).
It will be also be interesting to see the extent to which the Cloud ends up supporting, well, everything.