Goodbye BSS/OSS, hello MMB (Money Making Bits)

I have been harping on for years – many years – that the terms BSS and OSS are defunct and should be replaced with something far more generic like MMB: Money Making Bits.

You may laugh, but BSS (business support systems) and OSS (operational support systems) are leftovers from a bygone era when communications service providers (known as PTTs or phone companies then) had to clearly define and separate network functions from the rest. In fact, there were many more silos back in the day because every new bit of technology that came along and couldn’t be slotted into an existing space created its own.

The fact that we have been able to distill almost everything down into OSS and BSS, (or network and business) is a miracle of sorts – but one that we must now seriously look at dispensing with altogether.

Network was once king and commanded most of the CSP’s attention (and budget). It is still critically important, of course, but anybody can set up a network these days – if they have the money – and simply running a network is fast becoming a commodity business. That means strong competition and tight margins.

Without the burden of worrying about their own networks, digital service providers (DSPs) or over-the-top/OTT players (as some people continue to refer to them) can concentrate purely on services they can provide, and how they can best monetize them. They achieve this by offering base services (the hooks) for nothing, then gradually introducing revenue earning services around them (loosely termed the ‘freemium’ model).

The main criteria for these services is that they are appealing, scalable, secure-ish, and can be easily priced and charged for. The service is the company, and everything a DSP does, as a general rule, is centered on delivering a seamless experience to the customer. Innovation, IT, marketing and finance departments exist but all are focused on that seamless experience for the customer – and that is what makes the money.

For CSPs the same level of focus cannot be maintained if different departments only worry about their particular pieces. Many have tried to change the focus to the customer, some by pushing each and every employee to think how their efforts will impact the customer experience.

It could be argued that this service-heavy approach is not suitable for telecoms operators looking to become more agile, innovative and develop their business as digital service providers. But core business systems like billing are still critical and may actually be on the ascendancy.

Whilst telco services head toward subscription and flat rate pricing models, partly to reduce overheads in BSS systems, and partly because customers are demanding simplicity and transparency, newer industries are thinking about creative pricing models to differentiate themselves from heavy competition in the digital services space.

When I say “creative pricing”, that really means complexity – devising plans that sound good to consumers and are cleverly presented but actually end up costing them more. Let me give you some examples.

Uber prices trips based on demand and availability of cars and differentiates service depending on the class of vehicle used, but if it’s busy the price goes up. Banks are charging for transactions based on type and how valuable a customer you are. At Amazon, one product can be purchased from any number of online retailers at varying prices. We're even seeing billing for API usage.

Perhaps the most amazing example is the Amazon Web Services (AWS) Lambda model that differs from the typical AWS Pricing where servers are rented by the hour. With AWS Lambda, you don't have to allocate specific servers. You simply just run code (software/programs/applications) based on your memory requirements. Each time your software executes (e.g. code runs – after all software is nothing but a list of instructions with an eventual end-point) it is counted as one execution. An AWS Lambda example pricing is made of two parts: computing charges (based on time) plus request charges (number of executions) for the same application, minus any free usage thresholds or discounts.

Who said billing was dead? With all these and many other pricing models hitting the market, complex billing will be around for some time to come, but as part of an operation that does not differentiate between BSS and OSS. After all, probably none of these digital services companies even know what those acronyms stand for.