Business Models and Billing Challenges

Abstract

INTRODUCTION " The Cloud " is a new paradigm that is increasingly consolidating itself inside IT industry and that will change computing inside companies they way we know it. The same way that in past times bread was kneaded and raised at each home, and nowadays this has become quite odd, in a few years time it will be strange for a company or public institution not to have its own IT platform in the Internet. The reasons behind this change are the clear advantages that the Cloud offers: flexibility to obtain resources on demand, easy management , access from any geographical location, cost shifting from CAPEX to OPEX (allowing finer control of expenditure and avoiding costly acquisition of assets), and cost reduction due to economies of scale and strong competition among cloud providers. ABSTRACT The advent of the Cloud has leveraged a number of challenges, both for customers and service providers. Companies willing to embrace the new paradigm must face some entrance barriers, such as security, privacy and trust concerns, vendor locking risk, legal issues, etc. While service providers may work to minimize these barriers, they must be especially careful when defining what may constitute the most crucial aspect for the success of their offerings: the business model. Different incarnations of the cloud (IaaS, PaaS, and SaaS) add to the possibility of offering public or private solutions, or even federated models. On top of this is the billing strategy: the ubiquitous pay-per-use approach (either in its most common post-paid incarnation, or in a novel prepaid version) is only the starting point for a wide range of innovative solutions, including bundling or QoS considerations, which European project VISION Cloud is tackling as part of its research efforts. This chapter aims to provide a comprehensive discussion on the most relevant business factors that the Cloud confronts. As of now, there are still great differences between the speed at which this paradigm change is taking place in one place or another. In some cases there are not yet enough companies demanding these kind of services to form a critical mass, or the services offered are scarce. Even in those places where there are strong cloud providers, the problem is often related to medium-to-large company CEOs that are reluctant to change. People in charge of IT in those companies are aware of the advantages of having a Cloud infrastructure, but they are hesitant …