MGI Research

Friday, Nov 27th

Last update03:17:28 PM GMT

Cloud Billing Beyond Subscription Economy

Price : $199.00

Research Summary

In May 2013, we published MGI 360 Ratings on a number of next generation Cloud Billing providers as well as a Market Ratings Report (MRR) which provided an in-depth overview of this important emerging space. As a follow up to this research, we have focused on several cloud billing software vendors that were founded by teams coming out of the traditional on-premise billing and customer service management and especially with backgrounds in telecom space. One of these companies is Austin, TX-based Transverse and we have invited one of its co-founders and COO Chris Couch to join us for a 20 Questions session to shed light on the business drivers and dynamics of the complex billing and payments systems. During the 20 Questions, Chris shared approaches to complex billing problems, customer use cases, his views on pricing and competitive dynamics in the cloud billing space.

20 Questions is an MGI Research Interview Series with leading technology industry executives, innovators, and investors.

Key Issues

  • Who are the winners and losers of cloud computing?
  • What new business models are enabled by the cloud?
  • What are the trade-offs of the various cloud computing architectures?
  • What are the economics of cloud computing?
  • What are the limitations of cloud computing?
  • Is cloud computing a zero-sum game for the IT industry?
  • Who are the emerging leaders of cloud billing?

Chris Couch Bio: Chris Couch is a Co-Founder and Chief Operations Officer of Transverse. Chris has spent 17 years focused on telecommunications software solutions. Most recently, Chris served as SVP and CMO at ACE*COMM Corp. (NASD:ACEC), a leading provider of wireless OSS, BSS, and value-add services platforms. Prior to ACE*COMM, Chris was the CTO at RateIntegration, Inc., a Virginia-based company focused on software for wireless service providers. Chris also led consulting practices at American Management Systems and Logica, where he oversaw or participated in the ground-up launch of several wireless carriers around the world. Chris has also designed and built wireless software products for Evolving Systems (NASD: EVOL), which was sold through Lucent Technologies. The products he developed included Over-the-Air activation, CDPD, and MSC to BTS mediation (IS-634).

Excerpts from the research note (9 pages total):

Andrew Dailey: Although Transverse is privately held, can you give us a sense of the scope and scale of your business today?

Chris Couch: We started the company in 2008 selling to large enterprises, primarily telecommunications firms. In 2011 we launched TRACT, a cloud based billing product now used by more than 50 companies. Our customers include major public companies such as Demandware and Generac, as well as some very large privately held companies like EdgeCast.

Andrew Dailey: How do you define the markets you are trying to address, and what are the key growth drivers in those markets?

Chris Couch: We take a cross-industry view of the market. We are selling primarily to two types of customers. The first are companies heavily dependent on spreadsheets, and the business end is looking to automate back-office processes such as accounts receivable, revenue recognition, customer account management, and collections. A second set of customers includes companies in which general managers or line-of-business owners are looking to launch new services based on a recurring-revenue model. This might be an older company like Generac, whose primary line of business is manufacturing, but is now launching new services for the maintenance and warranty of the generators they sell.

Andrew Dailey: How is Transverse different from traditional billing and payment management systems? How is it similar?

Chris Couch: We see three sectors in the market. On one side are large industry-focused billing systems like Amdocs and Comverse. These huge vendors offer very robust systems, but their products start in the low multimillions of dollars to implement, and their total cost of ownership on an ongoing basis runs two or three times that. On the other side are traditional recurring-payment managers like credit card gateways or PayPal. These handle very simple recurring payments, but they cannot manage the complexities of customer accounts, upgrades, and downgrades. They do nothing at all with usage or volumetric pricing; they are limited in their ability to get analytics, and they do not touch anything with revenue recognition. Between these two sectors is a huge gap -- which this is exactly where we fit.