Cloud billing: Tearing up the revenue model

What else can the cloud do for us? As all merchants experience the digital explosion, it’s time to ask what more could be outsourced there. One easy place to start is billing. You would expect me to say that, since I work for a SaaS...

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What else can the cloud do for us? As all merchants experience the digital explosion, it’s time to ask what more could be outsourced there.

One easy place to start is billing. You would expect me to say that, since I work for a SaaS billing provider - but we have a set of blue chip customers who make the case.

With the SaaS option, you can tear up your revenue model and start again, without having to tear down your billing platform. Increasingly, this is an important consideration; being able to experiment with pricing and respond to customer needs quickly and cheaply is how digital services will survive.

All organisations with online billing have to adapt as customers manage their money differently these days, switching from direct debit to standing order, cancelling subscriptions for pay-as-you-go, and using debit cards instead of credit cards.

Getting pricing right

Added to this, businesses are having to experiment, exploring the best ways to price themselves in the digital market. A current example is Next Issue Media - a publishing consortium including the giants News Corp, Conde Nast and Time Inc.

Despite their pedigree and power, publishers like these are tired of throwing money at their websites, without seeing the kind of returns they’d like. The new fear is that tablet technology will prove to be the next money pit.

In the tablet arena, the value of readership and advertising hasn’t been determined yet, so being able to swap and change their pricing is really important.

The consortium set up its own Newsstand for tablets using the Android operating system, i.e. Samsung Galaxy Tabs. Six preview titles (Esquire, Popular Mechanics, Fitness and Parents, Fortune, Time, and The New Yorker) came online a few months ago and at the end of June they announced six more (Better Homes & Gardens, Car and Driver, Sports Illustrated, Vanity Fair and Wired).

They’re allowing some free access to their tablet publications to start with, then there’ll be separate prices for each title. They’ll also experiment with promotional bundles across the family of titles. And as the Japanese or German editions of magazines are added, they will be able to take on the new currencies and taxes.

The flexibility means Next Issue Media can get going, and start finding their way. They’ll add new titles, go global, and move on Apple’s iOS system when the time is right for them, piecing their strategy together as they go.

Building in security

As well as flexibility, merchants are worrying about handling their customers’ payment details securely. With constant stories lately about high-level hacks on companies and government departments, C-level types are scratching their heads and having to check just what security they have in place.

A SaaS option comes with Level 1, PCI DSS (Payment Card Industry Data Security Standard) compliance.

Niche cloud services like billing are helping business stay lean and flexible, as the digital economy takes them in new directions.

Posted by Sanjay Sarathy

Sanjay is the Chief Marketing Officer at Vindicia , whose Software as a Service products integrate clever marketing into billing platforms. Vindicia’s billing platforms help clients manage relationships with 70 million customers.