monetizing the cloud

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1 Monetizing the Cloud Aria Systems Billing and Subscription Management Robbie Forkish, Senior VP, Engineering

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Robbie Forkish of Aria Systems discusses current billing and chargeback systems for cloud-based applications

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Page 1: Monetizing the cloud

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Monetizing the Cloud

Aria Systems

Billing and Subscription Management

Robbie Forkish, Senior VP, Engineering

Page 2: Monetizing the cloud

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Agenda

Aria Systems introductionThe Challenge of Cloud MonetizationReal-world examplesQ&AResources and contact info.

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We are the technology leader in billing and subscription management

Founded in 2003 – The pioneer in SaaS billing

>300% growth in monthly recurring revenues in 2009

Broad Customer Success

Cloud Providers: SaaS, PaaS, IaaS

Telecommunications

Publishing

Social Media

Entertainment

On-Line Retail

Online Gaming (MMO)

Aria Systems: Company Profile

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The Challenge of Cloud Monetization

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The Cloud: Great News for App. Developers

Flexibility• Wide range of platform choices

Elasticity• Scale up applications without

purchasing infrastructure

Lower costs• Pay-per use• Low/no fees to get started

Distribution• New way to make pre-configured

apps and stacks available on a global basis

• No infrastructure purchase required for customers / end users

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“It’s Not About The Money….”

“Oh Yes It Is!”

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Considerations for Cloud Monetization

Economic modelsDistribution / SalesService DeliveryOther subtleties and complicating factorsAutomation

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The “Dark Side” of Pay-Per-Drink

“Pay-per-drink” is the early dominant model for cloud application usage“Grew up” at Infastructure-as-a-Service (IaaS) layer, largely driven by Amazon.com and DevPayGood fit for infrastructure• Storage• CPU• Memory• Bandwith

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But The Cloud Isn’t JUST Infrastructure

Compute | Network | StorageInfrastructure

Components | ServicesPlatform

User Interface | Machine Interface Application

Cloud Computing Stack Monetization OpportunitiesUsers, Seats,

Features

Content, Security, etc.

Storage, CPU, Bandwidth

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Economic Models: Monetizing Your Value

The cloud doesn’t have to take away your ability to monetize the value of your application.How do you measure that value?• Transactions?• Records?• Views?• Service Level?• Features?• Seats?• Songs?• Instances?• Combination?

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Resellers and distributors can be force multipliers in the cloudHow do you sell and distribute your application?• Online?• Direct?• Via Partners?• Geographic Resellers?• OEM’s?• Changing mix over time?

Considerations• What can they sell?• How do they get paid?• What’s your connection to the end

customer?

Distribution / Sales

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Delivery

Someone just purchased your cloud-based serviceWhat do they need to use the service?• One or more accounts?• Physical device?• How many of your services

need to be turned on?• What about third-party

services?

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Other Subtleties and Complicating Factors

Time-bound free trials• Opt-in or opt-out

Freemium products and services• Track usage or time to provide targeted “upgrade” notices

Pre-paid usage• Tracking debits against pre-paid credits• Reminding subscribers when it’s time to re-up

Hierarchical accounts• Associating “household” accounts in B2C• Associating departments and business units in B2B

B2B• Custom contracts, discounts, etc.

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The Automation Imperative

Preserving margins with cloud-based apps requires significant automation• Subscriber signup (including

channels)• Activation of services• Management of entitlements• Billing and payments• Customer service and online self-

service

Without automation, you can’t scale, and miss out on the opportunity of cloud computing

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Real-World Examples

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Real-World Examples: SaaS Startup

Launch of AWS-based collaboration platform for designers and marketing/ad agenciesChallenges• Automating monetization

of discrete feature values• Value of application had

no relationship to storage, bandwidth, or other units supported by Amazon DevPay

Voice Over IP

Video Conferencing

File Storage

Future Add-ons

Core Application

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Real-World Examples: EMC Mozy

Offering cloud-based backup for consumers and small businessesChallenges• Subscription fees plus usage

(storage)• Multiple OEMs and

distributors• Branded signup and self-service• While retaining pricing and

offering control for Mozy

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Real-World Examples: RightScale

Offering management tools for popular cloud platformsChallenges• Billing for millions of hours of usage

in dozens of countries• Accepting multiple payment

methods – net terms (B2B), check, credit card

• Tracking usage during free trials• Customized B2B contracts with

changes to rates and usage tiers per-contract

• Providing integrated invoicing for B2B customers with multiple departmental users of RightScale

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Questions?

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Resources

www.ariasystems.com• Product information• Customer examples• White papers and technical information

www.ariasystems.com/contact• To contact our team

[email protected]’s speaker• Robbie Forkish, [email protected]• Lance Walter, [email protected]

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Thank You!Monetizing the Cloud

Aria Systems

Billing and Subscription Management

Robbie Forkish, Senior VP, Engineering