As CSPs move toward SaaS-based BSS, they must avoid investing in impostors that will not deliver the order of magnitude cost and speed improvements they need.
A true software-as-a-service (SaaS) business support system (BSS) will prove itself by delivering an order of magnitude improvement in the cost to manage every dollar of revenue. This is the key reason why more communications service providers (CSPs) are embracing SaaS options as they replace their legacy BSS infrastructure.
TM Forum data shows that most CSPs are increasing how much they spend on SaaS BSS. Nearly half of CSPs - 45% - expect strong growth in their SaaS BSS spend through 2025, while another 28% expect modest growth. Taken together, 73% of CSPs will spend more on SaaS-based BSS (see chart below).
At the same time, most CSPs want to cut or eliminate costs for BSS maintenance, customization, and for the care and feeding of software instances – whether in data centers, private clouds, or public clouds. The TM Forum data shows that 65% of CSPs expect to pay less for BSS maintenance as they shift to SaaS BSS (see chart) – with 30% expecting a strong decline in these costs.
CSPs face risks from fake SaaS BSS offerings
CSPs all face the same risk as they invest in new SaaS platforms; buying a solution that’s labeled SaaS but isn’t the real thing.
SaaS BSS should eliminate expensive change requests. It should avoid awkward negotiations around annual maintenance contracts that can feel like hostage standoffs. SaaS BSS should free a CSP from expending resources like cash, talent, and hardware, to run end-to-end BSS environments. And it should provide ready templates, blueprints, integrations, and other assets derived from and proven within its user base to ease, accelerate, and reduce the cost of a CSP’s business.
When fake SaaS is implemented, however, maintenance and customization costs aren’t eliminated; a CSP isn’t freed from operating a customized BSS variant; and benefits from SaaS factors like multitenancy, elasticity, and openness are never realized. In the end, the order of magnitude cost improvements CSPs expect from SaaS BSS will not come to fruition. CSPs need to know how to spot fake SaaS from the start.
How to spot fake SaaS BSS
As CSPs seek new SaaS BSS options to replace and upgrade their legacy stack, they need to separate genuine SaaS offerings from impostors. A true SaaS BSS should not be hard to identify. It should be a cloud-native, public-cloud based platform that has always been SaaS – not a transplant from another era. And the real thing will have specific characteristics, such as:
- Offers one multi-tenant platform, one code steam, run via Agile and DevOps.
- Operated by one team of experts that the CSP does not employ for itself and which the vendor does not employ only for the CSP.
- Enables rapid setup and configuration without customization.
- Provides on-demand access, a hallmark of genuine SaaS offerings. Large groups of users should be able to login and go without extensive installation or implementation periods. If a provider requires setup time before granting access, its product does not qualify as true SaaS.
- Presents clear release cycles with automated and scheduled updates derived from the best innovations across the user community.
- Eliminates missed project deadlines, scope creep, change requests (CRs), and maintenance costs.
- Is cloud infrastructure agnostic to maximize SaaS economies of scale, ensure rapid time to market, enable more regional flexibility, and to support data sovereignty and compliance.
- Employs cloud native security as well as open, standardized integrations to other best-of-breed partners.
For CSPs evaluating new BSS platforms that are marketed aggressively as SaaS – but which may not be – finding any of these characteristics to be missing is a clear sign that the product in question is not a real SaaS platform.
Where does fake SaaS come from?
When fake SaaS emerges, it is often due to how a CSP’s legacy BSS landscape has evolved. These established systems and processes have grown over time to become the central point for capturing customer and revenue data. For many years they were considered too risky to disrupt. The supplier base made its living maintaining these crucial systems and processes as well as their inertia.
Now that CSPs want to shed legacy BSS cost and the inflexibility that comes with it, most have changed their BSS requirements and asked for SaaS options. Legacy suppliers have often responded with new offerings they feel comfortable calling SaaS but are not.
Here are some examples of how a legacy BSS can be mislabeled as SaaS:
Lift & shift
In a “lift and shift”, the BSS supplier rehomes a customer’s highly customized BSS instance to a cloud and operates it there rather than within its own datacenter or the CSP’s. It is effectively the same legacy BSS but run by the supplier in a cloud. And it isn’t SaaS, it is a hosted managed service. It will still depend on maintenance and upgrades to sustain the custom instance. The CSP receives little or no benefit from other platform users. And once ported to one cloud, the CSP may be locked into that cloud for as long as it utilizes its now cloud-bound legacy BSS.
Create a one-off public cloud instance
In this example, a supplier implements a new instance of its BSS product in a private or public cloud for an initial customer and then prices and labels it SaaS. The solution remains a separately maintained and likely customized instance of the vendor’s product. It does not have a common code stream; will not offer community-wide shared assets, resources and new componentry; and will not deliver cost, time, and scale advantages like real SaaS.
Change the label
In many cases, suppliers have priced legacy solutions defensively, offering a predictable recurring license model, but continuing to tack on customization and upgrade costs. In the worst instances, a supplier puts the BSS in a cloud but marks up and passes along the infrastructure costs. Similarly, a vendor may put anything it can in a public cloud, call it SaaS, and expect to be forgiven for conflating the two.
Any way you spin these cases, they are not real SaaS and they will not deliver the capabilities CSPs are counting on to capture new revenue or the massive cost benefits they expect from SaaS BSS.
What real SaaS BSS should cost
The crucial difference between real SaaS and fake SaaS is in what each costs to operate relative to every unit of revenue or customer account managed. In Aria’s experience, a true SaaS BSS should cost a CSP no more than 25-75 basis points per dollar generated. Compare this to legacy BSS, which traditionally costs 300 to 400 basis points per revenue dollar managed – an order of magnitude greater cost.
There are tangible reasons behind these cost differences that are compared in the table below. The table breaks down the costs fake SaaS BSS platforms will carry forward versus a real SaaS BSS, which either minimizes these costs or eliminates them entirely.
Ultimately, these costs, which speak to the fundamental technical advantages of SaaS, are the decisive difference between fake and real SaaS BSS. Impostors will not deliver the benefits CSPs need from their BSS – not in cost, scale, or capability. That makes fake SaaS BSS the wrong path for CSPs who must reduce their revenue management costs dramatically and improve their ability to adapt fast to new markets and generate more revenue.
For a closer look at a true SaaS BSS and a better idea of how to spot and avoid the fakes, contact Aria Systems for a live demonstration today.
