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Optical/IP

Axiom Meets Its Wanadoo

British OSS vendor Axiom Systems Inc. has landed itself a deal with yet another European broadband player as it continues to claw its way back from a post-bubble slump (see Axiom Wins Wanadoo Deal).

Wanadoo Netherlands, one of incumbent operator KPN Telecom NV's (NYSE: KPN) main DSL competitors, is using Axiom's software to automate the provisioning and activation of its broadband services.

Cliff Evans, Axiom's product director, says the initial pilot in the Netherlands has been so successful that Axiom is "close to closing" some further business with other parts of Wanadoo SA, which is France Telecom SA's broadband business (see France Telecom Ups Q3 Revenues).

Winning further business with Wanadoo would further strengthen the startup's finances, which have grown dramatically since slumping to the very low single-digit millions a few years ago. Evans says Axiom registered about €12 million (US$15.6 million) in sales in 2004, and about 75 percent of that total is incremental revenues from existing customers generated by Axiom's pay-as-you-grow commercial model.

"We don't have license revenues," says Evans. "The value of our deals is determined by the success of our customers. In broadband access, the more customers that are provisioned by our Axioss system, the more money we get. For VPNs, we get paid by each site that's connected."

Evans says Axiom generally gets between €1 and €2 per DSL subscriber from its broadband operator customers, and with Wanadoo Netherlands set to connect between 200,000 and 300,000 broadband users using the OSS firm's system, the deal could deliver anywhere up to €600,000 ($777,000) in revenues. Evans adds that Wanadoo Netherlands has a target DSL customer base of around 2.2 million long-term.

That's distinctly possible in a country that is just starting to see the local loop unbundled and where broadband services are affordable and in demand. In the latest Heavy Reading report, Next-Generation Broadband in Europe: The Need for Speed, analyst Graham Finnie notes that the Netherlands is "a highly competitive market and a perfect environment for broadband: affluent, technology-savvy consumers, and the densest urban environment in Europe, with short loops and many MDUs [multi-dwelling units]." (See HR Tracks Europe's Need for Speed and HR: Europe Sticks to DSL Guns.)

Wanadoo is one of the operators installing its own DSL equipment in KPN's local exchanges and is deploying IP DSLAMs from ECI Telecom Ltd. (Nasdaq/NM: ECIL), according to Evans, who says the Axioss system can provision broadband services whether a line is unbundled or bundled from the incumbent operator.

The Dutch account isn't Axiom's only success of late. The firm has landed a number of notable deals, either through direct sales or through its extensive set of partners, which, for the broadband sector at least, includes key DSL vendor Alcatel (NYSE: ALA; Paris: CGEP:PA). (See Telecom NZ Picks Axiom , Telecom Italia Picks Axiom, Energis Picks Axiom for Service Provisioning, TDC Picks Axiom to Activate DSL, and Alcatel Resells Axiom OSS.)

And Evans says the firm has just signed its largest IP VPN management deal to date, potentially involving tens of thousands of sites, with Deutsche Telekom AG's (NYSE: DT) international business, T-Systems Inc. That deal, he says, was brokered with a great deal of help from another key partner, Juniper Networks Inc. (Nasdaq: JNPR)

But such deals are not won without a fight. Axiom says it faces a number of tough competitors, especially for the inventory element of its offering, where companies such as Cramer Systems Ltd. and Telcordia Technologies Inc. are the market leaders. But for the overall package of workflow, inventory, and service fulfillment, Axiom's big rival is MetaSolv Software Inc. (Nasdaq: MSLV). (See Comunitel Upgrades to MetaSolv OSS.)

"We managed to beat them to win the Wanadoo deal, but we're not complacent. MetaSolv has a very good activation product," Evans graciously concedes.

— Ray Le Maistre, International News Editor, Light Reading

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