Cloud Service Broker Revenue Stream Matching
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Solution Overview
Problem
The complexity of billing in cloud services broker platforms, involving multiple SaaS vendors, resellers, and varying pricing schemes, leads to disparities in billing rules and lost revenues due to inflexible contracts and inability to customize pricing based on entity types within the distribution channel.
Innovation Solution
A system and method for matching revenue streams in a cloud service broker platform, including a marketplace broker that manages contracts, monitors usage, and calculates billing periods, costs, and sales, with a transaction mediator storing billing information and reconciliation details, allowing for hierarchical management of resellers and end customers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If a cloud services broker integrates multiple SaaS vendors and resellers with varying billing schemes, then the system can offer diverse pricing options and service packages, but the billing complexity and difficulty of revenue matching increase significantly
Solution Approach 1:
The system segments the billing process into distinct components: revenue stream identification, cost stream identification, matching logic, and settlement. Each component handles specific aspects of billing independently, making the overall complex billing system manageable through modular processing of multiple SaaS vendors and resellers with different pricing schemes
Solution Approach 2:
The system introduces a broker platform as an intermediary between SaaS vendors, resellers, and end users. This intermediary manages the complexity by centralizing revenue and cost stream matching, acting as a mediator that coordinates billing across multiple entities with varying pricing schemes without requiring direct complex interactions between all parties
2Ease of manufacture
If billing rules are standardized across all entities in the distribution channel, then billing processing becomes simpler, but revenue loss occurs due to inability to customize pricing for different entity types
Solution Approach 1:
The system applies local quality by allowing different billing rules and pricing schemes for different entity types (direct subscribers vs. indirect subscribers, different reseller levels). Each entity can have customized pricing while the overall billing infrastructure remains unified, preventing revenue loss through standardization while maintaining processing efficiency through automated matching
3Reliability
If fixed markups and discounts are applied by upstream entities, then their margins are protected, but downstream entities cannot apply appropriate pricing for their customer segments resulting in lost revenues
Solution Approach 1:
The system implements dynamic pricing where markups and discounts can be applied at different levels of the distribution channel (upstream and downstream entities). The billing system dynamically calculates appropriate margins for each entity type and level, allowing upstream entities to protect their margins while enabling downstream entities to apply segment-specific pricing without revenue loss
Data Source
AI summary
Many software vendors offer their software via online service platforms. In one embodiment of a software services distribution system, a cloud services broker is used. A cloud services broker is an organization that acts as an intermediary between subscribers/end users and SaaS vendors. Billing in a cloud services broker system is managed through the cloud services broker because the cloud services broker is the only entity capable of managing the many relationships in such a software distribution system. However, revenue matching and settlement may be problematic. For example, the complexities of billing in a cloud broker system arise because of the intermingling of the types of SaaS vendors, the influence of resellers, and the various billing schemes offered by each of these entities. Implementing such a billing scheme must account for the variations in billing rules and billing schemes from the entities throughout the hierarchy (i.e. SaaS vendors, resellers, sub-resellers, etc.). Furthermore, there may be a disparity between billing rules from upstream entities (e.g. SaaS vendors) and downstream entities (e.g. resellers), whereby billing imposed on subscriber end users based on one particular entity billing scheme is inappropriate. The present disclosure relates to an improved system and method for matching revenue streams in a cloud service broker platform.