& 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
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 28, 1:00PM EDT
Gigabit 101
Will Barkis, Senior Technology Analyst, Orange
UPCOMING COURSE SCHEDULE
Friday, September 30, 1:00PM EDT
Gigabit & the Great Migration
Robert Howald, Vice President, Network Architecture, Comcast
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (0) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Wagner’s Ring
Time to Shut Up About 'Dumb Pipes'

9|22|16   |     |   (12) comments


Service providers can't compete with OTT players. It just isn't in their DNA. Instead, service providers need to embrace what they're good at -- providing reliable, secure connectivity.
Wagner’s Ring
Keeping Your Tech Career Going After 50

9|21|16   |     |   (13) comments


How do you keep your career moving forward when you're past the half-century mark?
LRTV Interviews
Peering Into the Digital Future

9|20|16   |   04:25   |   (0) comments


Nick Thomas, practice leader of digital media at Ovum, talks about how digital transformation in the technology, media and telecom sectors will enable the development of a new range of applications and services for enterprises and consumers and how the upcoming Digital Futures event in London will examine ...
LRTV Custom TV
Napatech Tackles NFV's Major Challenge

9|7|16   |   08:42   |   (0) comments


One of the main challenges for network operators introducing NFV is to combine performance and flexibility in a cost-effective way, but there is a solution, explains Napatech's Dan Joe Barry.
LRTV Custom TV
Huawei Optical Innovation 2016

9|6|16   |     |   (0) comments


Highlights of the 2016 Huawei Optical Innovation forum.
LRTV Huawei Video Resource Center
Are You Ready for Huawei Connect 2016?

8|31|16   |     |   (0) comments


Join us for an exclusive sneak peak of Huawei Connect, an integrated conference for the global ICT ecosystem taking place in Shanghai.
Between the CEOs
CEO Chat: UXP's Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Keeping Your Tech Career Going After 50
Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/21/2016
Time to Shut Up About 'Dumb Pipes'
Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/22/2016
Verizon CFO: Eat Our (Fixed) 5G Dust!
Dan Jones, Mobile Editor, 9/22/2016
Comcast Will Go Wireless in 2017
Mari Silbey, Senior Editor, Cable/Video, 9/20/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
You Thought Your Customer Service Was Unreliable... Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.