The billing burglar

Revenue settlement is a steal for Apogee Apogee Networks appears to have sneaked in the back door of the Internet billing space and stolen a potential billing bonanza from under the noses of IP billing vendors.

The loot comes in the form of revenue settlement in the content delivery arena. Some market predictions show that large service providers will be the ultimate deliverers of content. If that is correct, then letting an enterprise biller such as Apogee land a deal with Adero to provide revenue settlement for the new Content Bridge alliance may mean that telecom billers let the big one get away - at least this time.

Adero, along with Inktomi and America Online, formed the Content Bridge alliance last month (Telephony, Sept. 18, page 42). The alliance is meant to enhance content delivery across the Internet by ensuring that end users receive the most consistent and updated information from their ISPs. It will help content providers maintain control over the quality of their content, as well as help ISPs collect the revenue for delivering it. The alliance eventually hopes to drive standards for content delivery.

The alliance mainly consists of content providers, access providers and some network equipment providers. Adero sits between the various providers and deploys its EdgeFusion solution to monitor the content delivered by alliance members and acts as a central services point. Part of central services - which includes billing and revenue sharing and reporting - is known as revenue settlement.

"We are aligning the economic interests of all the players so that everyone who does something to deliver the service gets compensated for the value they have brought,"said Robert Carney, vice president of content management services for Adero.

To do that, Adero needed billing software that could manage the billions of transactions expected to cross its alliance partners' networks. For this, Adero tapped Apogee.

Apogee spent three-and-a-half years in the enterprise IP and content billing space doing the equivalent of revenue settlement for corporate clients such as Deutsche Bank, Texaco, Bristol-Myers Squibb and NCR.

"We have been able to take the cost associated with individual end users so they could understand what was happening on the [WAN] and, more important, so they could understand where the costs are and have a way to start to control those costs," said Tom Goldman, president and chief operating officer of Apogee.

The company took its content technology and developed a product called NetCountant Settlement. With the NetCountant rating engine, Apogee claims it can process 400 to 450 rated transactions per second compared with the 15 to 20 processed by its nearest competitors. The system will give service providers options beyond flat-rate billing.

"We have been preaching this story for a while, but as soon as the market tanked, people started talking about how to make money. We haven't been able to turn the faucet off since," Goldman said. "I don't think flat-rate billing ever goes away. Businesses will pay other businesses for things of value. There seems to be some pretty good acceptance on the consumer side for paying for content, but businesses are pretty clear: They will pay for content."

Progressive Strategies, an independent lab based in New York, evaluated Apogee's products for scalability and interoperability across Solaris, Windows NT and Linux platforms; the group also evaluated Apogee's real-time rating capability and its flexibility for defining new content services.

Based partly on those results, Adero went with Apogee - despite the latter's concentration in the enterprise space.

"[We] do understand that Apogee is a relatively new player, but there were a number of things they offered that were compelling," Carney said. "One piece was the ability to scale because if you think about the scale of what we will ultimately be doing, it's big."

Some of the same players in the Content Bridge alliance also participate in Cisco Systems' Content Alliance, which the company announced late last month. More alliances - and therefore more billing and settlement opportunities - may arise. The next could be another big one that billers won't want to let get away.