Telecom 'cloud billing' market ready to soar

Vendors that provide Billing as a Service (BaaS) account for 11% of the overall telecom billing market, growing to about $1.4 billion by 2015, according to a report by Innovation Observatory,

Today, many cloud-based billers will likely be start-ups and pure-plays, but Danny Dicks, the author of the report, believes that traditional vendors will re-design their current offerings so that they can be delivered from the cloud as well. Such moves are clearly a reaction to the growing success of subscription based billing providers who are making in-roads into the market. Companies such as Zuora, recently selected by Tata Communications to provide cloud services; Aria, selected by TeleDanmark’s broadband YouSee service; Cycle30 selected to rollout MVNE and MVNO services in Africa and MetraTech who created a new cloud based entity, Metanga, are all examples of the new wave of vendors.

The impact for telcos is twofold, as are the challenges. They are considering transferring their own billing processes to the cloud, a risky decision for risk averse telcos; and they are also having to address the billing requirements of others and needing to provide their own cloud based services.

The risk for telcos is simple and largely the same as the risk outsourcing always presents – loss of control.

When outsourcing was ‘the next big thing’ there was doubt in Europe. European telcos felt that they were outsourcing their prime asset – customer data. In North America the feeling was very different and telcos were more relaxed about outsourcing a difficult process so that they could concentrate on marketing and customer service.

There is also the misguided belief that putting processes in the cloud will reduce the demands on IT. IT has a list of priorities as long as the day and outsourcing some of the processes simply means that the rest of the to-do list moves up the priority stack, indeed the pressure on IT probably increases as the perception in the rest of the business is that IT suddenly has time on its hands.

Security and reliability are also still perceived as the biggest barriers to moving to cloud based services. Security is certainly in the spotlight and is being addressed, although according to PwC’s 2012 Global State of Information Security report almost a quarter of respondents reported that security was worse in their cloud service. Meanwhile the recent outages from Amazon and others have made companies consider the whole question more carefully.

There is no question that cloud services, like outsourcing generally, have compelling advantages. Questions for both suppliers and customers of cloud computing solutions are whether they can provide sufficient security and trust to provide a reliable, secure service.