When I look at the proliferation of Cloud platforms on which one can build the latest and greatest, the choices are truly staggering. Even more interesting is that as those Clouds are being populated with new applications, take rates are rising dramatically. Microsoft just released its Small Business (SMB) Cloud Adoption Study 2011 and the results show that for most SMBs, Cloud is becoming the way to buy your applications and IT services. The report indicates that:

• 39% of SMBs expect to be paying for one or more Cloud services within three years, an increase of 34% up from 29% today.
• SMBs paying for Cloud services will be using on average 3.3 services, up from fewer than two services today.
• The larger the SMB, the more likely it is to pay for Cloud services. For example, 56% of companies with 51–250 employees will pay for an average of 3.7 services within three years.
• Within three years, 43% of workloads will become paid Cloud services, but 28% will remain on-premises, and 29% will be free or bundled with other services.

This market data is incredibly positive, but what threatens the Cloud’s new delivery and sales model is a large and missing link. The missing link of many cloud platforms is a mechanism for an Independent Software Vendors (ISVs) to monetize their application simply and flexibly. Without that billing functionality it’s tough to offer a solution across the global channels and markets that the Cloud can enable. With the Cloud, entirely new business models are emerging for ISVs. Today, their application may require metered billing, recurring or even more complex charge models that force ISVs to totally rethink their pricing. So, despite a sunny forecast for the Cloud, make sure you’ve addressed the missing link of billing when creating your new solution.