Cloud billing and the 'subscription revolution': what do I need to know?

However, a further 11% say they are using a managed service – and with cloud penetration generally on the rise – Cerillion foresees dynamic growth in the cloud billing market as businesses strive to meet the demands of the new subscription-based economy.

As the subscription revolution gathers pace, agility, flexibility and matching products to the market's demands are key. This is the same both for small businesses or start-ups looking to get a foothold in the market by introducing new services quickly and cost-effectively, and for more established organisations wanting to expand into new markets.

TRP: What, according to the survey, do businesses see as the main benefits of cloud billing?

LH: The survey identified cost savings as the biggest perceived benefit of cloud billing systems. This attribute was highlighted by 37% of the sample and was most strongly supported by respondents in the manufacturing (59%) and telecommunications (47%) sectors.

Cost savings are clearly a major attraction for large companies (1,000+ employees), in particular, where 69% currently use on-premise enterprise software and 85% identified reduced cost as a key benefit to be derived from cloud billing.

Cost saving appears to be far less important a factor for smaller businesses who have had to take a lower cost approach to their billing anyway. It appears that these organisations are motivated more by wanting to introduce a structured approach to billing and ensuring the key information they need to drive their pricing strategy is easily accessible.

TRP: What does the survey tell us about what organisations are looking for from cloud billing providers?

LH: The survey revealed that 'proven billing expertise and having a track record of delivery' is the characteristic that businesses most look for in their cloud billing provider with 29% of respondents referencing it.

Businesses in the retail sector are most interested in their cloud billing providers demonstrating this capability with 58% of respondents referencing this; those in the education sector see excellent customer services as the key attribute, chosen by 40%; whilst the healthcare sector is most sensitive to industry-specific knowledge, picked by 38% of respondents as the most important.

To achieve sustained success, cloud billing providers will not only need to offer a genuine SaaS billing application, but must combine a heritage of billing expertise with excellent customer service and industry-specific knowledge. Very few providers can deliver this potent combination.

TRP: In summary, how in your view can businesses most effectively capitalise on the new service environment created by the subscription revolution?

LH: The new subscription-based economy requires the flexibility to combine subscription and usage-based pricing models, plus the ability to tailor offerings to the full range of B2B and B2C segments. Without this, even the best service in the world will be at the mercy of lower-priced imitators.

Fortunately, solutions are now coming on stream that can deliver the kind of business agility that the emerging breed of service providers need to be successful in the new economy.

With cloud billing solutions, businesses can choose the software edition and features that are right for them, and benefit from regular software updates as part of the service.

In summary, as the subscription revolution continues to gather pace, service providers can move forward with added confidence in the knowledge that enterprise billing solutions are now readily available in the cloud, and capable of enabling them to differentiate and drive business advantage.

Desire Athow
Managing Editor, TechRadar Pro

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website builders and web hosting when DHTML and frames were in vogue and started narrating about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium.