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Billing System Trends in the Internet of Things

By August 26, 2014Article

Aria Systems, launched in 2002 and headquartered in San Francisco, is a centralized hub providing a SaaS solution for full management of all aspects of billing in recurring-revenue businesses in all industries. In this interview, co-founder and chief evangelist Brendan O’Brien discusses industry trends around organizations migrating to sophisticated recurring-revenue management billing models in preparation for the Internet of Things (IoT) or “monetizing the IoT.” What trends are you observing in the way organizations are evolving with the Internet of Things? 

Brendan O'BrienBrendan O’Brien: There’s going to be an enormous focus on support of highly complex, usage-consumption-based monetization capability. We’re already seeing enterprises shifting away from solutions that really only support a pure subscription style of billing, that traditional Silver v. Gold v. Platinum “all you can eat for a flat monthly fee” model. And that shift is moving swiftly. Why are they making this shift? 

Brendan O’Brien: It’s not that there’s anything inherently wrong with the basic subscription billing model. It’s great for plenty of stuff. Obviously there has been a huge and welcome gravitation over the last couple of years toward subscription selling. 

But the IoT is about usage data. Even the most innocuous devices will be producing massive streams of data. As you go further up the device food chain we’re talking about devices producing data streams on the order of terabytes an hour. Wow. That obviously will impact billing systems. 

Brendan O’Brien: Yes. It’s very important if an organization’s monetization model includes any elements of consumption-based billing. But even organizations that continue to opt for a flat monthly fee monetization approach need billing systems that are capable of processing and centralizing all of that usage data for analysis purposes alone. Product managers just can’t do their job effectively without the ability to compare consumption to revenue, let alone to retain the flexibility to bill directly for consumption should they choose to. So how are organizations changing to address this need? 

Brendan O’Brien: What’s starting to change is the understanding that if all you can do is subscription it’s ultimately a limiting way of going to market, for two reasons. First, as I mentioned, organizations are demanding ever more nuanced options for monetization, such as complex usage/consumption models that quickly break the boundaries enforced by basic subscriptions. Second, they are realizing that a properly implemented “billing system” really needs to be much more than just a “billing system.” It needs to be more like a monetization platform that acts as the active corporate master for everything an organization offers to the market and all customer data and “event” opportunities involving the customer. 

Just a few years ago we would, more often than not, initiate discussions with prospects whom had already drawn up their system topographies before engaging with us, and we saw an “insert billing system here” box at some downstream “slave” location. Today, more often than not, they are coming to the table with a much more hub-and-spokes design in their heads. The market is maturing on that point rapidly and they already “get it.” What capabilities do organizations need in order to capture the maximum return in a recurring-revenue model? 

Brendan O’Brien: Recurring-revenue management fundamentally differ from one-time purchase models because of the need to focus on effective customer retention and mitigation of “revenue leakage” (the inadvertent giving away of unpaid service). 

Aria’s system supports those objectives by enabling a class of operation/integration/interoperation that is tighter and cleaner than one can ever get from an inherently passive API, which is often the only tool provided by other systems for getting stuff done. 

At Aria, we’ve always focused on three sets of tools that enable this higher level of functionality: our push-based event model that manages M2M broadcasts of critical data-state changes to external systems, a broad and granular ability to configure truly automated in-the-box actions for “lights out” billing and customer management functions and our infinitely configurable rules-based business process automation layer for the encapsulation of proprietary business functions. In concert, these capabilities ensure a platform that meets enterprises’ vast and disparate requirements for their different billing, customer care, selling and reporting models. Can you share any information for Aria’s plans for the remainder of this year? 

Brendan O’Brien: We’ll be further expanding our partnerships with, and integrations to, various systems that are adjacent to the core billing space and doubling down on our already-significant investment in functionality that supports complex, multi-layered, many-to-many billing models. We’ll continue to build out the capabilities of our “whatever you can dream up” business process automation system and deepen our offering in the revenue recognition space. 

We have a few other tricks up our collective sleeve, but understandably we want to play some cards close to the vest in this highly competitive market. But suffice it to say that monetizing the IoT/IoE is at the forefront for us and we are ready. 

Brendan O’Brien is co-founder and chief evangelist of Aria Systems. It is fair to say he introduced the world to cloud billing and innovated database-driven, enterprise-grade Web applications — before the concept of “cloud” was even on the horizon. O’Brien is at the forefront of the recurring-revenue revolution that is empowering enterprises and specifically enabling information systems and new business models to secure predictive revenue streams while improving business processes. 

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