More Related Content Similar to The 10 biggest metering and billing mistakes (20) The 10 biggest metering and billing mistakes1. The 10 Biggest Metering and
Billing Mistakes that Cloud
Service Providers Make
Alex Bligh
COO & CTO, Flexiant Ltd.
www.flexiant.com
© 2012 Flexiant Ltd
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3. § 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
www.flexiant.com
© 2012 Flexiant Ltd
3 § And much more...
4. 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
www.flexiant.com
© 2012 Flexiant Ltd
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10. 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
www.flexiant.com
© 2012 Flexiant Ltd
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11. 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
www.flexiant.com
© 2012 Flexiant Ltd
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13. 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
www.flexiant.com
© 2012 Flexiant Ltd
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14. Why conventional billing won’t work
“Telco Billing”
Ø CDR based
Ø Non-real time
Ø Inflexible
www.flexiant.com
© 2012 Flexiant Ltd
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15. Why conventional billing won’t work
Cloud customers expect:
Ø Real time billing
Ø Instant signup
Ø Their bill to be
comprehensible
www.flexiant.com
© 2012 Flexiant Ltd
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17. 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
www.flexiant.com
© 2012 Flexiant Ltd
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19. 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
www.flexiant.com
© 2012 Flexiant Ltd
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20. 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
www.flexiant.com
© 2012 Flexiant Ltd
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22. 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
www.flexiant.com
© 2012 Flexiant Ltd
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23. 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
www.flexiant.com
© 2012 Flexiant Ltd
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24. 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
www.flexiant.com
© 2012 Flexiant Ltd
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26. Try to do this...
www.flexiant.com
© 2012 Flexiant Ltd
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28. 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
www.flexiant.com
© 2012 Flexiant Ltd
query their bill
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29. • 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
www.flexiant.com
© 2012 Flexiant Ltd
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32. Photo Attributions:
• Seattle Municipal Archives
• Jo Jakeman
• Svadilfari
• Liz Marie AK
• Images of Money
• Dave Dugdale
• Ed Yourdon
• Believe Kevin
• NeoSpire
• 401(K) 2012
• Nodespt
• ClaraDon
www.flexiant.com
© 2012 Flexiant Ltd
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