Pipeline Publishing, Volume 6, Issue 9
This Month's Issue:
Business Class
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Value and Price in the Transition to Cloud-based OSS/BSS

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By Wedge Greene

How should we price OSS/BSS support software and service provider products in the transition from the “perpetual license” price model to the cloud-based subscription model?

Two years ago we reported that the transition to a cloud-based product infrastructure was underway, primarily lead by the end customer’s choosing of edge-based information portals and app stores. With the advent of a robust market for infrastructure hosting services in the cloud (Amazon, Sun/Oracle, Rackspace, Rightscale, GoGrid, and forthcoming major entries from Microsoft, Cisco, AT&T, and Verizon), a new generation of software product vendors are building their products to use the grid – and often only the grid, even when the grid is privately owned and maintained. Two years ago we compared the advent of cloud-computing to a new ocean filled with strange currents and undiscovered islands of opportunity. Today’s

Cloud computing is now the in thing;

profits to the service providers. But the cloud market was originated by service providers at the turn of the Millennium. It was unfortunately neglected during the retrenchment after the bust of the bubble. This is clearly not the case today. The cloud market is a more natural fit than is media delivery. This time service providers have market leverage with control of the networks over which the cloud is accessed.

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cloud market looks like Dubai, where they are building whole new, artificial islands in their sea, financed by hopes and dreams. But those hopes and dreams now tower over the developed world.

Two years ago we argued that service providers needed to put cloud-computing in the forefront of their strategic plans. It is no longer a prediction. Cloud computing is now the in thing; the TMForum provided a day track at their gathering last fall in the US and it is the central theme of their next gathering in France. Privately, the TMForum executives will acknowledge that the “two sided” market model has not panned out for providers. Media delivery has an existing, entrenched delivery model not willing to turn over its

Market Environment

Today most of the focus of service providers is centered on delivering hosted cloud services and supporting the data traffic of cloud services – being cloud vendors. But cloud computing also comes with a new model of software delivery and support. Service Providers must begin to use cloud computing internally in order to be creditable at delivering cloud services in competition with the likes of Amazon, Microsoft, and Cisco. Service Providers must “eat their own dog food.” This means buying new OSS and BSS products that use the grid or leaning on their strategic OSS/BSS vendors to convert to the grid. It means buying application infrastructure that enables the delivery of cloud-resident products and partnering with the new cloud-based product and infrastructure companies.

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