Business Platforms – BPO meets Technology: Pay-as-you-Use Pricing Model

Imagine a Cell phone operator instead of charging you ‘per call’, charges you based on high monthly rental irrespective of calls you make or Utility provider charges you high periodic fee irrespective of units you consume. Now after getting used to ‘pay-as-you-use’ pricing model in these areas, any other alternate pricing model is just unthinkable. As a consumer we are more comfortable and would love to pay ‘metered fee’ for the ‘service usage’ instead of just ‘service availability’. In fact much credit for the explosive growth of Telecom during last few decades can be easily attributed to user friendly innovative fee model which helped in taking telecom services closer to the mass consumers.
Platform service model is trying to emulate exactly that only by making its services available in much cost effective way for SMB segment – who often grapple with unpredicted demand and so cash flows. It allows companies to adapt to the changing external environment which could be either rapid growth or reduction in a smooth way. There are different ways evolving to define or meter the ‘service usage’ – for eg ‘$ spend’ in case of Source-to-Pay or ‘# Employee’ in case of HRO and all this make the pricing model evolution extremely challenging for managed services vendor from two aspect: One – Acceptance of pricing model plus price points by mass companies; two – Challenge for managed services provide to ensure a stable revenue. While it’s still a challenge for managed services providers to customize its services for ‘mass adoption’ and evolve an ideal ‘pay-as-you-go’ model, early drift indicates the future trend and the necessary need to come up with an innovative pricing model in this fiercely competitive services arena.

Comments

I.e. return how services were charged a long time ago, in timeshare, in cloud (yes, even at end of 60's we shared computing resources between universities (often small) and government "big" computers), selling companies extra resources and services to other companies, etc - time of mainframes.

Agree what an "unit of work" means, calculate the rate and charge! Easy in theory, sometimes a pain in reality, unit of work and rate negotiations need business skills more than technical. But data gathering was / is built-in in mainframe systems so easier than in the current "toy" systems. I can see this coming more common in SaaS, clouds, etc, meaning the disappeared capacity planning skills have to come back.

Posted by: tuomoks | September 25, 2009 12:45 AM

These type of deals already exist in the UK, whereby you get a monthly package allowance (which you use, whether it be predominantly calls, txt, web or a mix) and usually you get a new handset too when you sign up for a new deal. The monthly tariff is dependent on the package and the phone choice. Works well if you use the mobile a lot.

Posted by: Karen - Mobile Phones | February 28, 2010 7:20 PM