November 12, 2009 – Saugatuck Technology, a research-based market strategy consulting firm, recently released an analysis of cloud monetization capabilities, which they found to be critical in meeting the operational challenges of a software as a service business.

Recent Gartner studies showed that 99% of respondents are currently discussing implementing cloud solutions, and SaaS is expected to grow 18% in 2009. According to Saugatuck’s study, “Monetizing the Cloud: Assessing Billing and Payment Providers,” effective billing and payment solutions are essential in enabling monetization, providing agility in competitive situations, managing the channel, and reducing operational costs for any cloud services provider.

Cloud billing solutions target Web providers of content, online gaming, virtual worlds, media and entertainment – primarily consumer offerings – as well as SaaS, SaaS enablement, PaaS, business media, business content and other online business solutions. On-premise solutions have moved other verticals and segments such as media and entertainment, financial services, transportation, SaaS, SaaS enablement and cloud infrastructure.

The study’s key findings include:

  • Billing, administration and related marketing capabilities are essential to the operation of a SaaS business.
  • Billing systems used in SaaS and cloud environments must account for constant variations that occur much more frequently and sometimes uniquely.
  • Billing solution offerings vary, and no two solutions provide the same set of billing functionality, nor user interface.

The study profiles eight vendor options for monetizing cloud solutions, noting that these solutions target specific markets and are not directly comparable, and are not the only cloud billing solutions worthy of consideration.
“Any of these would be a decided improvement over homegrown and spreadsheet solutions,” said Saugatuck research VP Mike West, in a statement. “They permit cloud providers to focus more closely on their core value propositions, and outsource operational functions that can be performed more effectively by professional billing specialists.”

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