Case Study – IAAS Billing System for a US based Cloud Service Provider easily meets the 4 business defined KRAs

COMPANY

US Based Infrastructure As A Service provider company with global presence and clients across countries.
The client provided a host of cloud computing services such as the VMs, the VPCs, storage devices, memory, different computing processors (CPUs), different operating systems with licenses, different databases, their cluster services, load balancing services and different high availability options etc.

INDUSTRY – IAAS (B2B)

Infrastructure As A Service (IAAS) or Cloud Service Provider
Mainly focused on B2B services

CHALLENGE – Complex IAAS Billing

Revenue Assurance System required to ensure that the primary billing system is rating and charging the consumption of cloud based services accurately.
Revenue Reconciliation required at multiple levels – between the primary and secondary billing systems, between the order streaming system and the billing system, and finally between finance and the order streaming application.
Maintaining a huge product listing of different cloud resources. The products are offered in 12 different countries across the globe, hence the same products are offered in different currencies world over.
Integration involved by accepting order requests from an order streaming application which was integrated with the cloud service.
Tracking each cloud resource – Maintaining each cloud resource’s up time, tracking when it was started, when it was suspended, when it was shut and when it was decommissioned.
Rating and charging the consumption or usage of each cloud resource through billing mediation module.
Invoice generation that involved generating invoices for clients across the globe in different currencies.
Tracking monthly costs of running cloud resources and finding operating margin for the business.

SOLUTION – A Flexible Cloud Billing Software

jBilling (On Premise) as a Customised Cloud Billing Solution
A flexible Product Catalogue – this supports hundreds of different cloud service offerings to be set up and configured, in different currencies.
Integration with the client’s Order Streaming application that captured the resource usage, it’s creation or inception, suspension, resumption, shutting down or decommissioning. The jBilling API layer provided an easy to use API options that allowed the Order Streaming application to continuously create/update the data into the billing system.
A customised billing mediation module implemented such that the usage of each cloud resource is tracked, rated and charged accurately.
A bill run job that ensured that invoices are generated based on the consumption usage of each cloud resource, with each client account using hundreds of these cloud services.
Cost and operational margin tracking – A product catalogue that was split into two different entities, a parent entity to track operational costs and a child entity that tracked the revenue coming from clients.

How did the end-to-end IAAS Billing Solution work?

The diagram below pictorially shows the end-to-end workflow of how the IAAS Billing system was implemented.

Cloud Operations

The client’s cloud platform consists of an online web portal through which their customers could access the account and manage their own cloud resources. For example, the customers could add or commission new VMs, new VPCs, new storage devices and so on. They could take several actions through this portal such as adding new resources, suspending existing resources, resuming the suspended services, shutting down a certain resources, decommission existing resources and modify existing resources by re-configuring their attributes, such as upgrading a VM instance with more memory, or downgrading a database instance by using a lower grade CPU, and so on.

Order Management

Invoicing

The invoicing module usages the charges applied by the billing mediation module and generates the monthly invoices for customer accounts. There are two tenants (or companies) created in the system. The parent company represent the HO (or the Head Office) which defines the product pricing such that it represents the operational costs for all the cloud resources. The second tenant or company is the reseller company (or Sales Office) where the Product Pricing is defined as per the Selling Price of the cloud resource. The invoice generated in the Head Office represents the operational cost of the cloud, whereas the invoices generated in the Sales office company represent the client’s revenue.

This way both the operational cost and revenue are clearly available for each month from the system. The difference between the two values provides the operating margin. This provide the client a very tight control on their financials and product margins.

Reconciliation

The data generated from the invoices is used to reconcile with other systems, mainly the totals drawn from the primary billing system and from the Order Streaming application. This allows reconciliation amongst systems and early capture of any discrepancies in a critical business system.

Financial Reporting

The financial reports are fetched based on the revenue data generated, mainly the invoice lines carrying the information from the Product Catalogue. There is an easy to use Product Upload option that allows to update the various product parameters. Each product is created and maintained in 12 different currencies, owing to business being run in 12 countries. A csv based product upload option makes it easy to manage pricing changes on the products.

RESULTS

- - - - A customised cloud billing software that met the following 4 KRAs:
      - Revenue Assurance System implemented quite easily. The revenue totals can be checked each day between two systems and differences investigated and fixed easily.
      - Revenue Reconciliation – One reconciliation report provides the differences amongst systems easily and avoids end client impact in billing and charging.
      - Calculation of operating costs and margins, validating the pricing mechanism on a monthly basis. Giving business inputs so that decisions regarding price revisions can be made and communicated to customers proactively.
      - A robust billing process encompassing the billing mediation job and a bill run job that does the bulk of work and provides a complete system automation.
      - Additionally, a Reduced Capex and Opex for the cloud billing software; the benefits increasing with the growth of business over a period of time.