The 10 biggest metering and billing mistakes
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www.flexiant.com © 2012 Flexiant Ltd 1
The 10 Biggest Metering and Billing Mistakes that Cloud Service Providers Make
Alex Bligh COO & CTO, Flexiant Ltd.
www.flexiant.com © 2012 Flexiant Ltd 2
www.flexiant.com © 2012 Flexiant Ltd
§ 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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www.flexiant.com © 2012 Flexiant Ltd
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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www.flexiant.com © 2012 Flexiant Ltd 5
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
www.flexiant.com © 2012 Flexiant Ltd
• 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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www.flexiant.com © 2012 Flexiant Ltd 30
Who has the first Question?
Metering and Billing
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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
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