New business models are now possible, especially in the mediation of telecom players. Business as a service solutions fit into these new models
The cloud and its multiple “as a Service” variants (Infrastructure as a Service, Platform as a Service, Software as a Service) have already been deployed. “Business as a Service” (BaaS) is a new version focused on IT and business processes. This service provides business customers with a white label platform where they can outsource all their business processes: customer relationship management (CRM), offer packaging and pricing, order management, invoicing and management, payments, etc. “Billing as a Service” or “Cloud Billing” is one of the units that focuses exclusively on the outsourcing of invoicing and financially oriented processes. BaaS adds the ability to orchestrate multiple offers from different partners and manage these offers and customer base.
BaaS is modeled on the B2B2X model and facilitates flexible management of all mentioned business processes. BaaS enables players in all business sectors to seize new opportunities that traditional IT solutions have not offered until now. Thus, current economic models will gradually be replaced by new ones, which will rely heavily on BaaS’s ability to articulate and group the different services of the ecosystem of its suppliers and partners. There are many potential customers in the automotive, energy, utilities, retail, health, etc. sectors.
Companies in all sectors are upset by the ongoing digital revolution. The overhaul of the customer relationship to a more digital model as proposed by Salesforce.com is just the tip of the iceberg. All business activities of companies will be turned upside down by digital and BaaS promises a bright future: valued at 2.4 billion dollars in 2013, this market could represent almost 10 billion dollars.by 2018, ie almost 32% annual growth.
In terms of customer benefits, BaaS minimizes time-to-market and monetization of services. Outsourcing can reduce the resources needed to manage and maintain solutions. In addition, BaaS has the advantage of great flexibility with configurations that can be changed in real time and an open system designed to integrate new partnerships over time.
The economic model of BaaS is intended to reflect the image of the service: flexible for its customers. The implementation costs are very low compared to investments in “classic” solutions. The total cost of the service, including operational costs, also remains much lower than with a traditional solution. The pricing model, scalable according to the activity level (“pay-as-you-grow”) essentially includes two types: “retailer” model with a margin per transaction or resale model, classic in wholesale operations, where the supplier himself sets the prices that are offered to the end customers.
Different types of players position themselves in this market and offer more or less complete solutions: integrators, software suppliers and telecom operators. Among these, operators are particularly legitimate players due to their historical ability to manage the billing of complex and evolving services to tens of millions of customers and their ability to package them with other service bricks such as CRM and Analytics. However, their current billing systems are often too complex and not agile enough to enable the openness to third parties required by BaaS. Implementing an overlay that integrates into their existing systems is then particularly relevant.
That is the view of the British operator BT, a pioneer in this field. BT recently decided to strengthen its position in cloud computing services. The operator has chosen to partner with Infonova to deploy and manage its cloud solutions in twenty countries over the next five years. The Infonova R6 platform acts as a supporting abstraction layer for this ecosystem. The solution chosen by BT offers three key features: a turnkey, concept-to-cash solution that makes it easy and fast to monetize new offers; a solution originally designed to be fully configurable by its end customers by having access to the entire ecosystem; and finally an agnostic solution that enables the interconnection of all types of upstream customer offerings. For example, by relying on this platform, BT can offer customers in the UK utilities sector offers at approximately four times the cost of a traditional IT solution, while accelerating their digital transformation.
Jean-Michel Huet, BearingPoint Partner
Olivier Darondel, Manager BearingPoint
Sébastien Cazuguel, BearingPoint Consultant