The Future of Billing – Part 1: Cloud Computing Defined

What is Cloud Computing?

“Cloud” is a collective term for a large number of developments and possibilities. It is not an invention, but more of a “practical innovation”, combining several earlier inventions into something new and compelling. Much like the iPod is comprised of several existing concepts and technologies (the Walkman, MP3 compression and a portable hard disk), cloud computing leverages several already available technologies: high bandwidth networks, virtualization, Web 2.0 interactivity, time sharing and browser interfaces.

Cloud computing is generally considered to encompass services offered at three distinct levels:

Infrastructure, Platforms and Software (Application):

  • IaaS (Infrastructure as a Service):
    At its most basic level, the cloud provides raw computing power & storage capacity to run and manage any public or private cloud application. Examples include Amazon Web Services, VMWare vCloud and the Rackspace Cloud etc.
  • PaaS (Platform as a Service):
    Provides a platform, or runtime environment, together with tools with which to create, deploy & manage applications in the cloud. Examples include Microsoft Windows Azure and Google AppEngine.
  • SaaS (Software as a Service):
    Provides ready-to-go software (applications) that reside in the cloud and use a combination of cloud based compute and storage services. Common examples include, Windows Live, Gmail and in this guide, SnapBill.

The value proposition of cloud computing in your business can best be recognised from a financial perspective as it allows you to align your costs with revenues.

You no longer experience the problems of having numerous fixed costs that could potentially hurt your margins.

Some key benefits of cloud computing to take account of:

  • Cloud-resident businesses can scale revenue much faster than their traditional counterparts. Revenues can be generated at much lower cost.
  • The more modular, scalable, and open to third parties your businesses processes are, the greater their versatility.
  • The cost of an IT solution directly relates to the volume of a company’s business,
    compared with a constrictive, fixed-cost model.
What is SaaS?

Put simply, SaaS (Software as a Service) is a means of accessing ‘hosted’ software supplied by a third party company via a web browser. It has many other features, but typically:

  • Payment as you use it model – e.g. A monthly subscription (no upfront investment required)
  • Instant availability
  • Free package/trial –i.e. you try the solution before committing so you can make an informed decision for your business.
  • No IT overheads – i.e. you don’t need to own servers to run the software.
  • Access to new features and updates.

If you log-in to use your Gmail account from a computer or access your account on your mobile phone – you’re already using the cloud.

As a result, if you understand the benefits of using the above applications on a timely basis, you can easily grasp and appreciate the underlying key benefits of a SaaS solution for your business.

Why move to the cloud? – Business impact.

Let me paint you a picture of how pragmatic and useful it is choosing the cloud computing model in contrast to a traditional IT model.

For example, under a traditional IT model, if your business needs to change, it will likely take significant time to react (e.g. purchasing and deploying equipment, altering business infrastructure and processes etc.), coupled with the cost of upgrades. If the increased need for IT support was temporary, your business would be left with equipment and resources being underutilised.

With cloud computing, capacity is available when your business needs it. This limits underuse of IT systems when capacity drops, allowing for reallocation of resources as necessary. No longer do you have to go through significant software upgrades, which require large capital outlays, significant rollout time, and a loss of productivity during the adoption of a business-wide upgrade.

Your business can begin using new applications on a real-time basis, with little start-up costs and significantly less effort and complexity.

With many industries becoming more competitive, coupled with an unstable economy. We see markets changing, primarily spearheaded by economics, social and technology implications. Opportunity exists for those who see it.

Economics Implications:

  • Urbanisation
  • Managing profitability
  • Market competition

Social Implications:

  • Balance of power shifting towards customers
  • Demographic change
  • Social and online networks

Technology Implications:

  • Loyalty replaced by price comparison
  • Mobile technology

Businesses must constantly find creative and innovative ways to decrease their operational costs; try and convert fixed costs to variable costs. Do all this without compromising the efficiency and quality of their business. Cloud computing with SaaS as the solution provides such a context in which operational costs are reduced significantly and speed and efficiency scaled. This provides your business with an advantage as your business costs are easily aligned with your revenues.

Spend when necessary and save as required.

Try it out for free today and get in touch if you have any questions.