Price Modelling: Game Changer
At BT, what Winn considers the cloud began years ago. Winn's group, which sets rates and deals for mobile phone calling plans, had to compete with other departments for time on BT's internal, massively parallel servers. The group couldn't get enough time to run many queries to test new pricing ideas, Winn says, so they looked outside the company for computing power.
BT contracted with Kognitio for "data warehousing as a service", done on the vendor's servers on data BT ships via the Internet. Each month, BT sends the vendor hundreds of millions of call centre records, or about 3.6TB of data. Kognitio then performs regression analysis so BT can study customer churn, for example, and what-if scenarios to discover how new price plans would play out.
BT pricing specialists can log in to Kognitio's machines through a Citrix server to play around with the data, making queries using Business Objects tools. "The concept of interested people sharing a common resource has been around forever," Winn says. "It's the model of the combine harvester."
Augmenting its computing resources this way has allowed BT to launch ground-breaking mobile phone plans. A few years back, mobile phone competition was a race to the lowest per-minute rate.
BT wanted to know whether capped pricing would be profitable. That is, no call would ever cost more than, say, five pence. By applying that theoretical pricing package to a month's worth of real calling data from every BT customer, the company determined that such a scheme would be profitable. So BT went ahead with it. "BT is never going to be the lowest per minute," Winn says. "We needed to change the game."
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