Light Reading

Amdocs Rallies, Fills SDP Hole

Ray Le Maistre

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), Hewlett-Packard Co. (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
From The Founder
The comms industry is rallying to the cause of open, independent interoperability testing.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Telecom Innovators Video Showcase
Tail-f, Cisco & What the Future Holds

10|9|15   |   8:17   |   (0) comments

Steve Saunders meets with Tail-f's Director of Technology, Carl Moberg, in Stockholm to discuss becoming part of Cisco, ETSI MANO, virtualization and the need to combine science and business in order to create opportunities for service providers.
LRTV Interviews
Broadband Forum Embraces SDN & NFV

10|9|15   |   02:42   |   (0) comments

At Gigabit Europe 2015, Robin Mersh and Kevin Foster from the Broadband Forum explain how the industry body is adapting to meet the SDN, NFV and cloud needs of the access network sector.
LRTV Interviews
Top Tips for FTTH Operators

10|8|15   |   02:26   |   (0) comments

At Gigabit Europe 2015, Ventura Team co-founder Richard Jones talks about some of the key business case considerations for FTTH network operators.
LRTV Interviews
M-net Calls for FTTx Unity

10|8|15   |   03:45   |   (0) comments

At the Gigabit Europe event, Jörn Schoof from M-net, the Munich city network operator, calls for industry collaboration on fiber broadband access rollouts.
LRTV Documentaries
The Business Case Challenge for NFV

10|7|15   |   03:47   |   (0) comments

Virtual CPE is one of the early success stories for network functions virtualization, as service providers are finding flexible, programmable CPE solves a lot of logistics problems and reduces their cost. But even here, Masergy Communications faced a business case challenge, says CTO Tim Naramore.
LRTV Interviews
JT Offers Some Gigabit Lessons

10|7|15   |   4:08   |   (1) comment

Barna Kutvolgyi, managing director, Global Consumer, at JT, the incumbent operator on the island of Jersey, talks about how other service providers can learn from his company's gigabit broadband rollout experiences.
LRTV Interviews
AT&T's Chiosi on the Potential of Open Source

10|6|15   |   06:27   |   (0) comments

AT&T Distinguished Network Architect Margaret T. Chiosi talks to Light Reading's Carol Wilson about the potential for open source technology to liberate communications service providers.
LRTV Interviews
Network Security in a Gigabit World

10|6|15   |   05:52   |   (0) comments

Masergy's James Harrison talks about some of the network security and data center issues network operators need to consider as they expand their broadband services portfolios.
LRTV Documentaries
Telefónica: In Search of Virtual Simplicity

10|5|15   |   07:30   |   (0) comments

Francisco-Javier Ramon Salguero, head of Telefónica's NFV initiative, admits virtualization initially means greater complexity, but with the right abstraction layer, it is possible to create a services-driven network architecture. He explains how Telefónica's current trials and initiatives are aimed at doing that, and what his company and other carriers need to ...
LRTV Interviews
Gigabit Europe Takeaways

10|5|15   |   03:47   |   (0) comments

Participants from the inaugural Gigabit Europe event in Munich share their key takeaways from the conference.
Women in Comms Introduction Videos
Intel Urges Women to Take Advantage of Their Seat at the Table

10|5|15   |   4:27   |   (1) comment

Have inclusive and constructive conversations, attach a bigger meaning to your work and get involved in the cause, Intel's Monique Hayward advises women in comms.
LRTV Interviews
BT Updates on Plans

10|2|15   |   03:16   |   (2) comments

Peter Bell, CIO at Openreach, the access network division at UK incumbent BT, provides an update on the operator's trials and how Openreach is planning to deploy the broadband technology in its street cabinets.
Upcoming Live Events
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Network appliances have a strong value proposition in today's networks and will continue to do so in the NFV and SDN-enabled networks of tomorrow.
Hot Topics
M&A Speculation Swirls Around Juniper
Ray Le Maistre, Editor-in-chief, 10/6/2015
Cisco's Chambers Rules Out Political Bid
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/6/2015
Cord Cutting? 'Fraid so.
Brett Sappington, 10/7/2015
Infinera Fleshes Out Its Metro 100G Story
Ray Le Maistre, Editor-in-chief, 10/7/2015
Cisco Makes 'Martian' Connection
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/9/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the ...
Last week saw a big day in the 15-year history of Light Reading when Editor-in-Chief Ray Le Maistre and I were invited to interview the Deputy Chairman and Rotating ...
Cats with Phones
"What?! I'm on with Finisar about their stock price tanking" Click Here