Light Reading

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), 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
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
LRTV Huawei Video Resource Center
Getting Connected With eLTE

3|23|15   |   06:04   |   (0) comments


Trunked radio communications have entered the 4G LTE world, and with Huawei's eLTE solution, can now deliver a full range of data and video services as well as push-to-talk voice, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Funkwerk’s on Track With Huawei

3|19|15   |   3:23   |   (0) comments


GSM-R technology specialist Funkwerk and Huawei have forged a partnership that is benefiting both parties, notes Funkwerk's Gottfried Winter.
LRTV Documentaries
How EANTC Tested Cisco's Virtualization Solutions

3|18|15   |   5:49   |   (0) comments


Carsten Rossenhövel, managing director of independent test lab EANTC, tells Light Reading founder and CEO Steve Saunders about the innovative approach his team had to take when validating Cisco's service provider virtualization and cloud solutions.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Infographics
Hot Topics
Women in Tech Coming Into Focus
Sarah Thomas, Editorial Operations Director, 3/20/2015
The Rise of Industry 4.0
Ray Le Maistre, Editor-in-chief, 3/24/2015
Google Hires Wall Street's Most Influential Woman as CFO
Dan Jones, Mobile Editor, 3/24/2015
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
Net Neutrality Suits: Only The Beginning?
Alan Breznick, Cable/Video Practice Leader, 3/24/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.
Cats with Phones