Which Cloud Business Model for You?


Have you ever asked the question, “How does the communications cloud provider actually implement the service?” The answers may influence which business model is most attractive. There are several business models, some more attractive than others. Some are vertically integrated and others package together cloud services and software from multiple vendors. There is no single way to deliver the communications cloud services.

One of the differences is that most cloud communications providers use the Internet to provide access to their services. Some providers will bundle in MPLS access to their service. In the latter case, the provider can offer better voice quality because the voice sessions are supported with Quality of Service (QoS) that cannot be provided over the Internet.

Cloud Implementation Models

There are many available business models that cloud communications providers employ. Different business models can complicate some and maybe all of the issues that may arise when subscribing to cloud services such as Service Level Agreements (SLAs), security, privacy, and availability. A major question is what does the customer get when the SLA, or security, or privacy and or availability are not delivered? Does the customer get refunds, credits, or can the customer cancel the contract for cause?

Vertically Integrated Provider

A total cloud service where the provider owns the hardware, software, network and has the staff that implements and maintains the service. The provider in this case writes the software for their service. This has the advantage that special features and functions can be custom designed to meet the enterprise’s requirements. This implementation also have a single provider, other than the Internet access, responsible for all aspects of the service; SLAs, security, privacy, and availability.

Pure Cloud Service

This service can be located on cloud based servers that run provider owned software that is licensed from a third party software vendor. Software modifications need the third party to implement them. The SLAs, security, privacy, and availability are supported by the cloud platform, not directly by the service provider. If the cloud platform has a problem like access failures, then the service can fail. The service provider has to wait for the cloud platform to return to operation in order to turn the service back on.

Alternate Pure Cloud Service

Another model is a communications software vendor (e.g. call center software) operating on cloud provider’s platform. In this case, software changes to customize features and function can be implemented by the software vendor. The SLAs, security, privacy, and availability issues are the platform’s problems. The software vendor depends on the cloud platform operator to take care of these issues.

Third Party Implementation

A third party installs licensed communications software in the cloud and sells the service directly. Custom feature and function modifications are unlikely to be offered by this implementation. The SLAs, security, privacy, and availability issues are the platform provider’s problems. The software vendor depends on the platform operator to take care of these issues.

Resold Services

This is a reseller that owns nothing but resells cloud services from one or more wholesale providers. The reseller can be using the cloud provider’s name or it can be a private labeled service offered by the VAR. In either case, the VAR is only passing through a service. Customized features and functions are probably not possible. The VAR has no control over the SLAs, security, privacy, and availability of the service.

The business model will have a great influence on the SLAs and Acceptable Use Policies (AUP) that an enterprise will encounter. The contracts or service agreements may be biased toward the provider if the platform is not part of their operation but provided by a third. The stability of the service can be in jeopardy if the service provider business model is not successful. What if the cloud provider goes out of business? Or the cloud platform bill is not paid by the service provider and the information like voice mails, e-mails, user profiles, and dial plans are not accessible? This has already occurred with some wholesale as well as retail providers. What if the provider decides to terminate some functions or features? The enterprise should have a backup plan (possibly an alternative cloud provider) in place in case any of these situations occur.

by Gary Audin

Source: TelecomReseller

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