& cplSiteName &

Amdocs Rallies, Fills SDP Hole

Ray Le Maistre
11/6/2009
50%
50%

It's been quite the week for telecom software giant Amdocs Ltd. (NYSE: DOX), which announced a strategic acquisition and saw its share price spike following better-than-expected financial results.

Late Wednesday the company reported revenues for its fiscal fourth quarter (ended September 30) of $707 million, much better than the $670 million to $690 million it had been expecting. (See Amdocs Reports Q4.)

In addition, Amdocs also said it expected revenues ranging from $705 million to $725 million for the current three-month period to the end of December (the first quarter of its fiscal 2010), which is better than the analyst community had expected.

The news sent Amdocs's share price up by $2.27, about 9.3 percent, to $26.74 by the close of trading Thursday.

But it wasn't just the vendor's numbers that excited investors: During the company's earnings conference call, CEO Dov Baharav noted that Amdocs is "cautiously optimistic that our business is stabilizing earlier and at a higher level than we anticipated" as the economy stabilizes. He also noted that the expectation of improved sales during the current quarter is due to improvements across the board, from all types of customers in all geographies, and not just because of one deal or one customer.

"We are cautiously optimistic about the next two quarters, and overall we feel better. We do not see too many cases where service providers are planning to cut capex. We actually see a lot of them talking about new projects to generate revenues," Baharav stated in response to questions from analysts, though he noted that Amdocs isn't seeing much in the way of major transformation projects again just yet.

The CEO noted that managed services and sales to the cable operator market have been particularly strong recently, and that he expects that trend to continue next year.

Amdocs isn't the only company seeing signs of recovery. Late Thursday JDSU (Nasdaq: JDSU; Toronto: JDU) announced sequential improvements in its revenues and gross margins for its test-and-measurement and optical-components businesses, and provided an upbeat revenues forecast for the final three months of the year that exceeded analyst expectations. Its stock is up by 33 cents, more than 5.4 percent, today. (See JDSU Reports Q1.)

Amdocs is also looking for ways to grow its business further -- Baharav noted that making further acquisitions is still a top priority for his company. The company has expanded its portfolio and capabilities with a number of acquisitions during the past few years, the latest of which is the $50 million purchase of Dallas-based application server specialist jNetX Inc. . (See Amdocs Buys jNetX Amdocs to Buy ChangingWorlds, Amdocs Provisions $45M for JacobsRimell, and Amdocs Continues Spending Spree.)

Amdocs says the deal "accelerates Amdocs' position in the SDP market by combining jNetX's industry leading offering with Amdocs' existing customer experience solutions and service delivery capabilities."

Heavy Reading analyst and SDP specialist Caroline Chappell says the move was critical for Amdocs as it will fill an important hole in its portfolio. But it was also very important for jNetX.

"This is good news for both companies. For Amdocs, not having a telco application server capability was a glaring hole in its portfolio, weakening it against Alcatel-Lucent (NYSE: ALU), HP Inc. (NYSE: HPQ), Oracle Corp. (Nasdaq: ORCL), and Telcordia Technologies Inc. . For jNetX, the danger was that they could have been bought by a company with an existing NGIN [next-generation intelligent network] platform that would have shut them down. Both Ericsson AB (Nasdaq: ERIC) and Nokia Networks have partnered with jNetX, but both also have other app servers/NGIN platforms, for example," says Chappell.

By acquiring a standards-based technology in this area, Amdocs has "sent a strong signal to the market -- a market that has long tried to marginalize JSLEE [Java Service Logic Execution Environment]," notes the analyst. (See AlcaLu & HP: SIP Can Wait.)

"The acquisition pits Amdocs head-to-head with Alcatel-Lucent, which has also recently embraced JSLEE, and which publicly stated it sees the NGIN application server as strategic. Operators are acquiring NGIN apps servers ahead of SDPs, and if vendors lose the operator on the platform side -- for example, if they go to Oracle or jNetX plus a systems integration partner -- they lose the follow-on SDP and OSS/BSS transformation business too," says Chappell.

And that's exactly what's been happening. "The network equipment providers have been losing business to the JSLEE vendors, particularly jNetX, which went live with one customer each month during the first half of 2009, which is a great performance for a small company," notes Chappell, who says it's yet to be seen exactly what Amdocs will do with jNetX.

What's clear, though, is that Amdocs, along with AlcaLu, HP, and others, regard Java-based application server capabilities as a clear differentiator in the market, and in Amdocs's case, it hasn't been afraid to splash some cash in order to stake its claim to be a vendor partner for operators developing their next-generation service development capabilities.

— Ray Le Maistre, International News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
All Change in Video

2|11|16   |   33:12   |   (1) comment


At this moderated panel at 2020 Vision in Dublin, Alan Breznick, Cable/Video Practice Leader of Light Reading, sits down with Jeff Finkelstein, director of network architecture at Cox Communications, to discuss the rapidly changing video market.
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
AT&T Lights Fire Under 5G, Plans 2016 Trials
Iain Morris, News Editor, 2/12/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Andreessen Facepalms on Facebook Free Basics
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/10/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.