the 10 biggest metering and billing mistakes
DESCRIPTION
If you are considering selling cloud services or are already doing so, you need to get to grips with metering and billing. In this presentation you will discover that some of your assumptions on what is required to be successful will be proven wrong. For instance, we will explain why you may need to generate up to 3,000 times more customer records than an average mobile phone operator and the implications of doing so. Find out more here... http://learning.flexiant.com/flexiant-cloud-orchestrator-download-xfF4R/TRANSCRIPT
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The 10 Biggest Metering and Billing Mistakes that Cloud Service Providers Make
Alex Bligh COO & CTO, Flexiant Ltd.
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§ Why conventional “Hosting billing” and “Telco billing” approaches do not work
§ Why many companies are losing revenue and margin every hour
§ What cloud customers demand from cloud billing and why existing systems are unsuitable
§ What you need to support resellers and white labelling, multiple price plans, and multiple currencies
§ How you can overcome the implications of handling big data sets
§ How to remove complexity from your customer billing models
§ And much more...
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Why us? • Heritage • Made the journey from hosting • Launched Europe’s first public cloud services • Over 100 customers using Flexiant Cloud Orchestrator • Metering & Billing is an acknowledged strength
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Metering and Billing
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Metering and billing is...
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But they turn this...
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…into this
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What is it?
Metering and Billing
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What is it? Ø Metering
§ Measuring consumption of resources
Ø Rating § Correlating resource
consumption with a product that has been purchased
§ Combining the two to form a charge
Ø Billing § Aggregating charges to form a
monetary amount to be invoiced
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What is it? Ø Invoicing
§ Producing an invoice in respect of a charged amount § Handling of sales taxes
Ø Collection § Automated / semi-automated
collection of amounts owing § Credit card processing, direct debit/
credit processing Ø Dunning & Credit Control
§ Maintenance of accounts receivable § Handling of credit limits, aged
debtors and credit exceptions
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Why Conventional Billing Won’t Work
Metering and Billing
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Why conventional billing won’t work
“Hosting Billing” Ø Subscription billing Ø Fixed bill per month Ø One bill per month per
customer Ø Non-real time
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Why conventional billing won’t work
“Telco Billing” Ø CDR based Ø Non-real time Ø Inflexible
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Why conventional billing won’t work
Cloud customers expect: Ø Real time billing Ø Instant signup Ø Their bill to be
comprehensible
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Typical Issues for the Cloud Provider
Metering and Billing
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Typical issues for the cloud provider
Ø Multiple existing systems § All typically unsuitable for
cloud billing Ø Strategies to reduce the
number of invoices Ø Resellers and white labeling Ø Multiple price plans Ø Multiple currencies Ø Flexibility
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Did We Forget to Mention Big Data?
Metering and Billing
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Big data sets Mobile phones in UK
Ø Number of handsets approx. 60 million
Ø Number of calls per month per subscriber, approx. 150
Ø One year, number of records about: 100,000,000,000
Ø Records per customer per year: 1,800
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Big data sets Cloud IaaS platform
Ø 50,000 customers, 2 running servers per customer
Ø 100,000 virtual servers Ø Hourly billing Ø 6 components per server Ø Around 200 inserts per second Ø One year, number of records: about
1,000,000,000,000 Ø Records per customer per year:
10,000 - 5,000,000
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Pricing Policy
Metering and Billing
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Pricing Policy Ø Our single most common post-
sale question: § “How do I price my products?”
Ø First understand your cost
structure § Model your platform § Cost every component § Recognise some are linked (e.g.
RAM/CPU) § Marginal cost basis often helpful
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Pricing Advice and Pitfalls Ø Use pricing components that are
§ Measurable § Aligned with your own costs § Verifiable § Explicable § Necessary
Ø Obscure components sometimes cost more than less obscure ones § e.g. Disk I/O will cost you far more than disk space
Ø Don’t be tempted to ignore these costs because § Your costs and revenue will be unaligned § Worse, you will attract unprofitable customers
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Pricing Advice and Pitfalls Ø Remember where the
components are measured § Consider thin provisioning,
caching
Ø Linked Components § e.g. RAM/CPU ratio set by your
hardware choice § If customers use a different ratio,
you will end up with suboptimal utilisation
§ Use economic incentives to drive desired behaviour
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The Dangers of Complexity
Metering and Billing
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Try to do this...
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…and not this
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Simplicity Ø Some billing systems are very
powerful Ø Do not be tempted to use every
feature Ø Start off with a small number of line
items Ø Add more later if necessary Ø Remember, your pricing model needs
to be explained: § by you to your customer § by you to your reseller § by your reseller to their customers
Ø Remember, one day someone will query their bill
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• Single pane of glass • Multi-hypervisor • Multi-cluster • Highly configurable UI • Flexible self-service • Multi-level metering & billing • Fine-grained permissions • Application management • Intelligent workload placement
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Who has the first Question?
Metering and Billing
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