Microslicing. Have you heard of it? If not, you’re not alone. It’s a term recently coined (pun intended) by the folks at AWS who are regularly looking at new ways to make money. When your firm is focused on selling the ethereal – the cloud and data stored in the cloud qualify – then there’s an urgency to making money where you can on the use of bandwidth and services. It’s so different from selling a ‘real’ product that companies and even smart C-level executives still have difficulty understanding how to make money in the cloud.
But as Amazon and Microsoft have shown (along with Google and other large data and cloud storage players) there is money to be made. The biggest challenge if you’re not at their level or if you’re an ISV or an end user of these services, is fully understanding how much of the cloud you’re using and what you’re actually paying for. Cloud commerce isn’t brain surgery, but as referenced in this recent NY Times article, microslicing is.
According to the piece, it’s the scale of operations that means money for companies selling cloud storage and access to data in the cloud. In fact, this process of consumption billing has been going on for years – just not in the cloud computing arena. Think about rental cars, hotel rooms, health clubs. Each charges you based on the use of a product or service, but they also levy a fee based on time and consumption.
Imagine if you were able to break down your use of cloud storage to the point that you paid only for the time you were accessing the data or uploading it to the cloud. Sounds pretty good, right? Well, the same philosophy holds true for those companies delivering cloud services. Microsoft, Google and Amazon can each charge companies for the bytes used in cloud storage. They can also provide price breaks to firms that are using greater amounts.
The real opportunity lies in solutions that help to track usage and deliver detailed cloud billing statements based on consumption billing of cloud resources. That’s what Orbitera does. So, when a company pays a set price to access one line of software code – when there are millions of lines of code being accessed all the time – Orbitera is able to provide an accurate assessment of the cost to you or your client.
According to the article, “When tolls that tiny are paid often enough, they can make a billion-dollar business. At Amazon Web Services, which pioneered this method late last year, there is no charge for the first million times a customer runs code. Thereafter, AWS charges by the million times, or for the hundreds of milliseconds the computer is used.”
If you recall any hollywood heist film where the bad guys are trying to use a computer program to round up their accounts by fractions of a penny. This process somehow results in billions of dollars being re-allocated from ‘nobody’ because these were only fractions of a penny. Well, that process actually can and does result in profits for the big cloud-services companies. Fractions – or microslices – of pennies can power enterprises to lofty positions in the marketplace. And it’s here today in the cloud…you need to know how it works so you don’t lose your penny fractions.
The Times goes on to say, “This economics of tiny things demonstrates the global power of the few companies, including Microsoft and Google, that can make fortunes counting this small and often. In other words, you have to be really big to worry about making money off things that are really tiny.”
As stated numerous times, it’s critical for cloud services companies to know how data is being used and how much of it is being used. Further, getting detailed cloud billing statements delivered by the experts can put your company on a fast track to increased profits and stability.
If you still have questions about cloud billing and cloud commerce solutions, or how product and service marketplaces are changing almost daily, talk to the experts. Send an email to the Orbitera team at firstname.lastname@example.org.
Real opportunity is available for resellers who can take advantage economies of scale achieved by channel providers. Learn more about how Orbitera can help your business accelerate its transition to selling cloud-based software and services by scheduling a demo.