The cloud market is growing and so are the number of resellers. No news on that side. Now that the cloud market is maturing, typical problem areas for billing cloud offerings are starting to emerge.
3 Cloud Reseller Growth Phases & Associated Billing Solutions for Cloud Offerings
Regardless of the size of the organisation, the problems surrounding invoicing are fairly the same. However, the solutions are highly dependent on the phase in which resellers of cloud services are located. In this article we cover the 3 growth phases of cloud resellers with associated billing solutions that can be distinguished, and the corresponding downsides.
Startup Cloud Reseller: Mostly Manual Processing
For startup cloud resellers, billing cloud offerings is still quite manageable. The number of cloud vendors and (invoice requirements of) customers is limited. Insofar as there is a distinction between software subscriptions and pay-per-use pricing, this can also be dealt with.
In this phase the billing is mainly done manually, based on the billing reports form Microsoft, AWS and VMware. Companies are often inclined to become very creative with spreadsheets. They explore the limits of the possibilities within them. Every month a series of steps is followed manually to get to an invoice per customer.
After the invoice has surfaced from the spreadsheets, the next step is to process all of this correctly in the administrative systems.
Monthly Recurring Process
The biggest downside with this way of working is that the entire exercise has to be done manually every month. The result of this is a very labor-intensive process with a high probability of error.
Growing Cloud Resellers: Scripts as a Step Towards Automating
When startup cloud resellers expand, there comes a point that doing the billing manually will take up a considerable amount of time. This is the point where a different solution needs to be considered. A professional billing solution might be a little too early for organizations in this phase. Working with scripts is usually seen as a good interim solution – automation within limits and within the capabilities of the organization.
A Developer’s Job
Creating these scripts often ends up with a developer. Although scripts can offer an interim solution for certain situations, it is often disappointing in the end. What starts with creating a ‘simple script’ quickly turns into a delicate process to perform all desired actions for billing. Writing such scripts therefore takes more time than intended. Time that a developer could also have spent driving your technical offerings.
Lack of Flexibility
Another disadvantage of such a setup is the lack of flexibility. For instance, when the business development team comes up with a new cloud offering, or one of the vendors makes changes to the billing reports. This again requires extra time from the developer to process the changes into the scripts.
Is It Time for a Professional Billing Solution Yet?
During the growth phase cloud resellers come to a point where it is time for a serious billing solution. But when are you at that point? Although this differs from organization to organization, you can say that this becomes interesting when 5 or more working days are spent on the entire billing run – from collecting and organizing the consumption to sending out the invoices.
When you’re about to enter these 5 days, the time has come to investigate your options. Basically, it comes down to the good old make or buy decision. Read more about the considerations to make here.
Enterprise Cloud Resellers: Professional Billing Solution
When cloud resellers as an organization continue to grow, they enter the enterprise segment. The billing has been taken care of by a professional (made or bought) billing solution that optimally integrates with your provisioning platform on the one hand and administrative software on the other.
A proper professional billing solution is at least able to:
- + Extract the usage per customer from your vendors’ billing reports and combine this into one invoice
- + Provide enough flexibility to deal with changing pricing plans, service structures, etc.
- + Provide your accounting or financial software with the needed information
- + Give you a decent amount of insight on your billing numbers – costs and revenues, amongst others.