By Sramana Mitra and guest author Shaloo Shalini
Today, the telecom industry charges its subscribers based on fixed price business models for data services. But to keep up with the rate at which bandwidth consumption is scaling, telecom vendors will almost certainly need to adopt a variable pricing model, such that they can charge based on consumption just as they charge for voice services. The utility industry charges based on how much energy or water is consumed, but the telecom industry assumes unlimited data usage for a fixed fee.
In this interview, James Dunlap, president of Cycle30, shares his insights about the transformation of order to cash workflow in the telecom space as part of adoption of cloud computing by GCI. Cycle30 is a fully owned subsidiary of GCI, Alaska. GCI (NASDAQ:GNCMA) is an Alaska-based company providing voice, video, and data communication services to residential, commercial, and government customers. During the discussion Sramana and James touch upon several blue-sky opportunities for entrepreneurs, especially in billing and metering.
James Dunlap heads Cycle30 and is responsible for strategic direction, operations, and financial performance. He has twenty years of leadership experience in retail, consumer products, utility, and telecom. Prior to Cycle30, he held senior roles at GCI, Campbell Soup Company, and Nordstrom.
Founded in 1979, GCI introduced long-distance competition to Alaska and has since grown to be one of the nation’s premier integrated telecommunication providers. The company employs 1,250 Alaskans and has a current run rate of $440 million.
Cycle30, Inc., a GCI company based in Seattle, Washington, with eighty employees, provides billing services in North America. The company’s offering covers all order-to-cash systems required by converged telecom, cable, and utility providers. Cycle30 has helped to transform GCI from a multiproduct carrier of various services to a truly converged provider of bundled, high-value telecom services, consolidating its billing systems, and increasing operational efficiency and competitive agility.
SM: What are your thoughts on cloud computing from general industry perspective and also from your organization’s point of view? How do you characterize where we are today in terms of cloud evolution? Has your organization rolled out any serious workloads to the cloud yet?
JD: We are certainly beyond pilots and evaluations in terms of cloud computing adoption. We are using cloud computing in production today. Maybe a little background would help to set the context. We are a subsidiary of a public company, GCI, which is a large telecom, cable, and wireless provider based in the state of Alaska. We are a new subsidiary based in Seattle, Washington, in the hosted billing business and are focused on telecom, cable, electric utility, and natural gas providers. We spun out of GCI and took a staff of about eighty and formed a new subsidiary that is focused purely on Canada and not Alaska.
As part of this spin-off, we needed to move our data centers to be ready for additional customers. Having agreed that we needed to move them and we needed to look at the marketplace, as we really did not build our own facilities. Instead, we wanted to find the best providers in the market place and leverage their assets and facilities. We landed on SunGard as our provider of choice for data center facilities. Initially we were planning to go into a fully hosted facility outside of the Denver airport in Colorado. Later we ended up within a disaster backup facility located in Phoenix, Arizona. Before we could get both of these facilities online, just from a time perspective, with equipment shipment and turning them into production, we needed a client implementation to rapidly turn up both development and test infrastructure. Since our equipment was not up and functional in the client’s data centers yet, that client brought us up via the cloud computing environment in Philadelphia, Pennsylvania. So we had a real-world experience where had cloud computing not been a production-ready asset for us, we would have had to turn down business.
SM: Explain to me what your business is. You are not running a telecom operation. Are you providing infrastructure for the telecom?
JD: Correct. I spent seven years as a CIO at GCI, so I am very familiar with the entire infrastructure necessary to run the corporation as well as trends within the telecom industry from a CIO’s perspective. When we founded the company – Cycle30, the spin-off from GCI – we had two purposes: one, to better serve GCI as a customer, and two, to attract and retain other telecom and utility providers in the market and provide hosted billing services to them.
SM: I would like to have this conversation in the context of GCI. Explain to me what part of GCI’s strategy is in the cloud. What exactly are you doing with it?
JD: Sure, I can do that. Our entire “order to cash” infrastructure is cloud based. That includes all the systems and processes necessary from the minute you take the order from the customer until there is money in the bank.
SM: What is the thinking behind moving that to the cloud?
JD: If we look at the large IT organization in terms of what their core competencies are, it is likely they would say that running data centers is not one of their core competencies. For example, the largest tier 1 companies can really afford that sort of infrastructure in doing it right all the way. However, for mid-tier companies, there is a funny sort of gray line where you are not large enough to afford the type of data center a tier 1 company would. At the same time, you are not small enough to be able to get by with a smaller, lower-tier quality of service facility that a small company would have. You are right in between; you don’t have necessarily the funding to build a full-blown data center yourself and do it in a quality way, yet you are not small enough to operate in something that is in a lean and mean start-up kind of environment.
SM: When you are talking about serving out of a data center – for GCI – how big is the customer base that you are trying to cater for?
JD: GCI has a subscriber base of 450,000.