Cloud billing is one of the most important yet the least talked about terms in the Cloud industry. Nobody we believe, wants to get into the complexities of it. But in order to set your foot in the cloud industry, it’s important to understand the cloud billing- the whys and hows behind it!
What is cloud billing?
A cloud hosting provider needs to identify the costs of IT resources before and after their use so that:
They would know and track which IT resources they are spending on and which are more in demand.
Which resource is being used by which user and in what amount?
The very tantalizing promise of cloud is “cost efficiency”. The reason most businesses are following cloud strategy is that it provides them a platform where they can get ample resource options but they have to pay only for what they use, better than traditional systems which involve upfront cost.
Thus, cloud billing is actually a sophisticated system of generating bills, based on the usage pattern of any resource. A cloud centric billing system needs to deal with the complexities of products; the scalability and real time provisioning demands of cloud needs to be met by properly managed billing system. The following infographic shows the billing cycle of AWS cloud in our billing software, in which all the services taken by a customer using AWS cloud are included.
Cloud billing may be in form of a simple one-time sale of an application; recurring charges; or usage based charges which also bring in the concept of cloud metering.
The cloud products are billed based on their usage. This brings in the intricacy of measuring usage rate of a large number of virtual resources on the platform. A typical cloud bill consists of a number of services included in the cloud package, which includes the processor, RAM, OS, bandwidth etc. Like the cloud order description shown in the following screenshot:
Seems difficult, right?
So, how does metering work?
Metering in simple terms would mean “measuring the rate of usage.” It is the process of measuring and recording the usage of an application, individual parts of application, or specific services and resources.
In cloud you may want to know:
The time a user or customer spends using an application or service.
The number of queries against a database.
The number of times a specific service is accessed.
The processing time for requests, and more.
For example, in multi-tenant SaaS billing, you would want to know how much resources have been consumed by which user, as it involves pooling of resources for multiple tenants as against a single usage SaaS, in which billing can be one- time or subscription based.
Cloud metering and billing is indeed tricky and may result in numerous mistakes if not done and managed properly. It is important here to understand what your customers are utilizing and ensuring they are billed for it correctly. Also as cloud service providers, you can’t offer a service which may not monetize you fairly.
Thus billing in cloud is definitely not a piece of cake.
Complexities of cloud billing
The complexity of cloud billing arises out of its advantages. Yes, that’s true!
With so many customers using so many resources that may be used at an interval of an hour, minutes or even seconds, you think billing could be easy? It is complex because:
Some products/offers/discounts can be person specific.
Configuration of products is based on demand.
Different billing patterns.
Retirement or replacement of a service/product.
To manage all these transactions, you need an automated solution. Something that can keep track of a customer right from his sign up, to know which resources and services are being consumed and metering it. The best would be to get the entire account history on a single dashboard with a simple mouse click. The following screenshot of our billing software RackNap, shows how you can get complete user information in a single click, where all the services right from the RAM till number of IP addresses assigned, is available in a single view. Thus, RackNap makes cloud billing easier for you.
RackNap – the Business Automation solution by ZNetLive
ZNetLive’s RackNap is a cloud billing software that offers you a flexible billing management system and provides one-stop destination for automating all your business processes. With RackNap, bill according to the needs and patterns of the customer lifecycle. Manage every kind of billing – from one-time, recurring-pay-as-you-go, pre-paid to post-pay. You can also have a distinct pricing model for collected products with tiered pricing i.e. it can “bill everything”.
We at ZNetLive believe in making business productive and efficient by using different tools to grow our business like RackNap, which helps us in transferring value to our customers!
So if you are also struggling with the complexities of cloud billing, RackNap can surely provide you with an automated solution and help you bill more. 🙂