Monetising Cloud Services – Who will Pay? The Consumer or the Enterprise?

Recent research from industry analysts Pyramid suggests that operators need to adopt a range of innovative price plans to successfully monetise consumer cloud services. Creative pricing is needed to persuade consumers to move beyond free services and pay a premium, but operators also need to balance pricing strategies against the need to sustain usage levels and drive data demand.

On the other hand, we think that enterprise users are more likely to pay a premium for cloud services. They may be induced to adopt cloud delivery models by free trials and discounts, but their need for consistent levels of quality and ubiquity are suggestive of a greater willingness to move to accept subscription charges.

But cloud is a broad term. For enterprise IT applications, operators face intense competition from alternative providers. An area in which operators have proven expertise and which represents a simple means to launch a portfolio of cloud services is voice.

Although there are some OTT voice services that promise enterprise-grade quality, this is hard to achieve across all domains – fixed and mobile. Operators have the advantage here, as they can ensure network coverage and guarantee service quality. That’s why offering hosted voice services represents a secure way to enter the cloud service business. Rather than competing on uncertain ground, operators can deliver an enhanced yet familiar service directly to enterprise and SME customers that drives subscription revenues, unlike in consumer markets.

In addition, by launching hosted voice services, operators can quickly add complementary services, creating sticky offers and strengthening relationships with their enterprise user base. Rather than trying to compete with IT service providers, operators can achieve differentiation by playing to their strength and use this as a bridgehead to broaden their portfolio.

Such an approach reduces risk and improves ROI. It also leverages expertise that already exists, rather than having to take the more complex and costlier path of adding IT capabilities and knowledge. The cloud is now a ubiquitous term, but one that represents a big bet in consumer markets where free access has been the norm. Instead of trying to deliver the same set of services, operators should consider how they could differentiate their offer – which means focusing on markets that offer more reward and greater certainty.

 

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