Amdocs Ain't What It Used to Be

Amdocs Ltd. has been an influential and powerful player in the back-offices of communications service providers (CSPs) for decades, helping operators build and maintain their billing and customer care systems.

But for many of those years it was labeled (in a pejorative way by its rivals) as a company that marketed products but delivered expensive services (consultancy, integration, bespoke software builds) that would stretch an implementation timetable into years. "Amdocs has no real products," its critics would say (though they often neglected to add how much business that approach generated…).

Now, though, such criticisms carry less weight. And not just because Amdocs has spent the past 10 years expanding its product portfolio with a series of acquisitions, which has included (but which is not limited to):

2003 -- Xacct: Amdocs Buys Xacct (At Last)
2005 -- DST Systems: Amdocs Buys Into Cable
2006 -- Qpass: Amdocs Buys Into Content Delivery
2006 -- Cramer Systems: Amdocs Snaps Up Cramer
2007 -- SigValue Technologies: Amdocs Continues Spending Spree
2008 -- JacobsRimmel: Amdocs Provisions $45M for JacobsRimell
2009 -- jNetX: Amdocs Rallies, Fills SDP Hole
2011 -- Bridgewater Systems: Amdocs to Buy Bridgewater for $215M

Having more products isn't enough -- actually integrating them and developing a Service Provider Information Technology (SPIT) software system that ties them together is something else. And developing tools that enable customers to build their own applications is a step further again.

But it's that level of integration, and the capability to enable application creation, that can be found in CES 9, the latest software suite release from Amdocs.

The company has gone to town with its press release pitch -- it's extensive, to say the least, and full of buzzwords and phrases. At the first read, I expected "espresso-making function" to crop up as one of the bullet points, because everything else of use to a CSP's operations and marketing teams appeared to be in there.

You can see all the details by reading the press release: Amdocs Releases CES 9. (We're still waiting for the first telecom tech company to include a caffeine-related application in a new release, but we live in hope.)

But there are a number of key elements worth highlighting that, for different reasons, point toward a shift in corporate mindset.

Three developments of note
First, there's the integration between various Amdocs elements. Heavy Reading Senior Analyst Ari Banerjee, who is well versed on Amdocs and its portfolio, notes that the vendor has "done a lot of plumbing and created a lot of ready-made connections between different elements."

This is evident in the Omni Convergent Charging part of CES 9, which combines the company's "real-time charging, policy control, enterprise product catalog and service platform." Banerjee notes that this is the first time the Bridgewater policy management capabilities have been truly integrated with other Amdocs elements.

Then there's the Business Building Blocks element, which, according to Amdocs, offers "pre-integrated and pre-tested software functionality designed to support specific business needs and reduce time to market." Of course this only works if you are building applications with the Amdocs building blocks -- it doesn't cater for stitching in third-party code -- but this is empowering the customer, enabling CSPs to develop new capabilities themselves. That's a major change in thinking for Amdocs.

And then there's Proactive Care, a new customer care module that enables greater efficiency and availability of relevant information for customer care staff and the customers themselves. This is based on the analysis and processing of real-time information (it comes with the Big Data tag, of course) and it utilizes analytics capabilities that Amdocs has developed in-house. Banerjee believes it incorporates a "very good concept" in terms of customer care and notes that it "isn't slideware -- this is already functional and being used."

Amdocs is being a bit coy on naming names. Eric Carrasquilla, general manager of the customer management division at Amdocs, told Light Reading that CES 9 has been tried and tested by: a cable operator in Europe, which piloted the Multichannel Self Service capabilities; a mobile operator in North America (Proactive Care); and two fixed-plus-mobile operators in North America (Multichannel Self Service and Proactive Care).

Fiscal muscle
What hasn't changed so much is the financial clout of Amdocs. It has just reported quarterly revenues of $826 million and net income of $99 million for the three months to the end of 2012.

The company is something of a money machine. In its full fiscal year ending September 2012, it generated revenues of $3.25 billion and a net profit of $391.4 million.

But Amdocs knows it can't sit pretty on that business. It faces tough competition from the likes of Oracle Corp., NetCracker Technology Corp. and CSG Systems International Inc. for major billing deals, has a new international rival in the form of aggressive Chinese vendor AsiaInfo-Linkage Inc., and is challenged in multiple niche areas by a host of specialist vendors with real-time policy and charging, rating, mediation, customer experience management (CEM) and many other SPIT applications. (See NEC to Buy Convergys Unit for $449M.)

That's one reason why Amdocs is looking to do lots of things differently, including working with Microsoft Corp. (instead of Oracle) as an IT platform and database partner. (See Why Amdocs Is 'Seeing' Microsoft.)

Of course, Amdocs is still a company that relies on services for that financial strength: In that full fiscal year, only 4 percent of its sales came from product licenses, while the remainder was generated by services, and that ratio is hardly going to alter dramatically overnight.

But its DNA has changed -- it's now a company that is developing product solutions for customers. And that's not the way it used to be.

— Ray Le Maistre, International Managing Editor, Light Reading and Jeff Baumgartner, Site Editor, Light Reading Cable