CSP adoption of virtualization and cloud is changing how vendors and service providers approach pricing as well as technology.
Enterprises today seek more flexible billing alternatives, says Keith Langridge, vice president of network services at BT Global Services, in an interview. Increasingly they want CSP services and prices to complement their organizations' adoption of cloud-based offerings that deliver solutions on-demand, without long-term contracts or large upfront investments, he says.
BT's SD-WAN services will include try before you buy options and organizations can acquire the services on a utility basis, says Langridge. (See BT VP: All Routes Lead to the Cloud.)
Vendor pricing must support operational, not capital, expenditures, Prakash Nagpal, Infoblox VP tells the New IP Agency. With the release of NIOS 8.0, the vendor had to ensure its pricing model kept pace with the way customers buy software, he says. That includes more comprehensive subscription pricing, the ability to pay on a subscription base, or the option of purchasing with a subscription license, Nagpal adds. (See Infoblox NIOS 8.0 Adds NFV, Cloud Capabilities.)
"We are making our pricing model friendlier to that [opex] thinking process," he says.
VNF vendors should develop pricing models that vary with usage -- perhaps based on features, bandwidth or time used -- and rely on a smaller upfront payment, writes Prayson Pate, chief technology officer at Adva Optical Networks, in a company blog.
And vendors can get think inventively too, he adds.
"One of the great attractions of a virtualized service is that the incremental costs of enabling a service can be very low. This fact enables service providers to emulate cloud-based service and offer free trial periods. However, they donít want to pay for licensing when they are not getting any revenue," says Pate. "[Vendors can] accept contracts where you donít get paid until billing starts for the service, and then take payments based on a share of the revenue."
By using virtualization's flexibility on pricing as well as infrastructure, CSPs and vendors deliver added value to customers, meet enterprises' budget requirements and further differentiate themselves in an increasingly competitive market.
— Alison Diana, Editor, The New IP Agency. Follow her on Twitter @alisoncdiana or @The_New_IP.