|By Esmeralda Swartz||
|September 30, 2013 09:15 AM EDT||
Here at MetraTech we work hard to provide a billing and compensation platform that will help service providers monetize their services, whether those services are deployed in the cloud, across the Internet or other methods. However, we have learned that before proposing a billing solution, we first need to understand the full extent of the problems our customers face.
The cloud business model is already exciting enough, offering opportunities for a plethora of new services, delivering services in new and better ways and enabling collaborative business models that could be worth more than the sum of their parts. But, if all that isn't enough, the cloud is now being infused with "magical" properties. This week I read several articles that introduced a new concept that takes the cloud one step further: the magic cloud. Here is just one example from Billing World:
"Cloud computing is leveling the playing field and enabling rural and regional providers to deliver excellent customer experiences and to deploy new services on par with larger service providers with much larger customer bases ... rural or regional service providers can now overcome the budget and resource constraints that compelled them to develop custom business support systems (BSS) in-house ... the cloud ... democratizes access to the latest BSS solutions, while leaving ample room to grow." 
The cost of BSS/ OSS has indeed always been an issue for service providers, whether rural or not, and anything that lowers the cost of servicing a customer base will surely be welcomed. But the cloud "leveling the playing field" for small rural service providers? Hardly.
This assertion needs to be turned on its head. It is not so much that the economics of cloud make everything sweeter for the rural service providers. Rather, the economics of cloud make the small service provider market sweeter for giant BSS/OSS vendors. The big vendors have previously not been interested in the tier 3 or even tier 2 Telco market, because those small service providers had small budgets. Now, with cloud, the vendors have a chance to address that market by offering pay-as-you-grow, lower-overhead products. This is certainly an improvement but let's not pretend the small rural service providers are now on equal footing.
Whether this will be a better deal for the rural service providers remains to be seen. Now that the big BSS/OSS suppliers are interested in this market, we might see some dramatic new pricing models that will make the rural suppliers very happy. Of course, the big service providers will be looking for even better deals, and they'll get them. These deals will demolish any competitive advantage the small service providers might have had from the magic cloud, counteracting any leveling of the playing field.
Meanwhile, the rural service providers still have other economic problems to worry about. The last rural mile will continue to be more expensive per customer served than the last urban mile, unless the magic cloud can also change the formula for population density. And maybe, when the magic cloud is wafting over the land, the big wireless companies will spontaneously offer national voice and data roaming agreements priced to provide rural operators with a sustainable business into the future, and will suddenly feel the urge to provide backhaul when requested at a nice low price. Magic.