Sramana Mitra: What are some new categories of services you are seeing in the telecom business?
Tom Dibble: The two we are seeing predominantly are cloud services and content services. The lines are getting much blurrier now between classic telcos like AT&T or Horizon versus what AWS [Amazon Web Services] does. We are going to see a lot of competition in that market, as they are both competing for the same enterprise class of customers on a cloud-based service. [This is an area] telcos historically have not been targeting. AWS and others have been first movers there, so they have the market share, but the telcos have an eye on that market, and it is a natural place for them given their massive data center infrastructures.
In addition, I think that on the other end of the spectrum, they are also moving into adjacent areas with some of the classic cable operators in terms of providing content services – whether that is through your mobile device, your television set, or your tablet. A lot of these telco operators are looking at the last mile, which cable companies have historically provided, and looking at providing content directly to the end user. They have the infrastructure in place to do that.
SM: Both of those ideas make perfect sense. All the telecom carriers are starting to compete in the Netflix space and video on demand, and it seems to be a natural evolution of the process. That is again a subscription service.
TD: Whether it is subscription, usage, or some combination, we are seeing a lot of variance and experimentation now on what the optimal model is and what monetization strategy will give the customer the highest ROI for a target market. That is why customers want to deploy systems that give them the highest flexibility to be able to experiment with pricing, packaging, bundling, coupling of services, etc.
SM: And your technology allows people to do all of those models – whether it is meter pricing, subscription, free trial, etc.?
TD: Yes, we do. Anywhere you want to charge your customer, the only limitation is your creativity – whether that is a classic subscription, usage, high watermark threshholding, a series of one-time charges that may be very irregular in nature, or a combination of all of the above, that is entirely up to you. Subscriptions are one element of that, but they are one subset of monetization strategies that customers are now looking at harnessing with our technology.
SM: What are some of the biggest trends you are seeing in the billing and monetization industry?
TD: Our company focuses on selling to enterprise companies – Fortune 500 or Global 2000. Historically these companies would look to legacy on-premise building solutions to support their business. That could be in the form of an inbox, a classic OSS/BSS telco billing, looking at retrofitting an ERP implementation to support a recurring revenue initiative from a billing basis, etc. What we now see is that enterprises have a level of sophistication as well as a level of comfort with cloud-based architecture, and they conclude that both of those approaches are inadequate for where they want to go. The time of getting either getting an existing system retrofitted to support a new business model or the time of implementing a system is too slow for the speed at which these companies need to move, because it is too competitive now. Getting something to market quickly is mission critical for them.
Once a system is live, having that flexibility I described earlier to turn those knobs and dials based on the behavior they are seeing in their target market and turn it very quickly based on what they are witnessing are also essential to their success. You simply can’t do that with legacy on-premise billing applications. It requires yet another professional services engagement to come in and do customizations. We are seeing this shift for more and more need for recurring billing and subscription management technology. These companies are now requiring cloud-based architecture for their business needs, and they are moving away from legacy on-premise systems that they historically provided.
It doesn’t mean that we go in and say, “OK, get rid of your ERP system and your legacy BSS system.” We go in and complement what the existing system is doing. Then we use an existing system to support a legacy line of business and that is working sufficiently. But for a new initiative they want to launch, or if they want to tune an existing initiative to make it into the 21st century and they conclude their legacy system [can be supported,] that is when they bring in Aria to help augment what has already been installed and allow for that business to be a reality.