ItsOn Slams 'Stale' Ericsson, Huawei as It Lands Telefónica

The SaaS startup claims to be displacing giants such as Amdocs, Ericsson and Huawei in the service provider IT market.

Iain Morris, International Editor

February 9, 2016

5 Min Read
ItsOn Slams 'Stale' Ericsson, Huawei as It Lands Telefónica

Greg Raleigh does not mince words when explaining why so many operators find digital transformation such a nightmarish task. "They are going back to the same old stale technology vendors they have had for years," says the CEO of ItsOn, a SaaS player trying to upend the established order. "They are trying to fix the problems of old technology with old technology."

ItsOn Inc. has developed a cloud-based IT platform that is designed to give operators the automation capabilities of a web player and massive cost savings to boot. Raleigh claims the technology is "years ahead of Ericsson or Huawei or any of the other big competitors" in the market for modern back-office systems.

That marketing pitch and demonstrations of the ItsOn technology appear to have recently been working. Last month, the Silicon Valley-based startup announced a major deal with Africa's MTN Group Ltd. , which plans to use the ItsOn platform in South Africa before extending it to other African markets.

But the latest customer -- announced today -- is Spain's Telefónica , whose Mexican subsidiary is rolling out an ItsOn-powered range of mobile services under the brand of Movistar On. "Customers want more control over their mobile plans and monthly bills, and the ability to purchase and manage services via their smartphones," said Hernan Ozon, the chief marketing officer of Telefónica Mexico, in a statement.

That still leaves ItsOn with only a handful of big clients, with US mobile operator Sprint Corp. (NYSE: S) another high-profile customer. But more deals are in the pipeline, according to Raleigh. "We do have other agreements with Telefónica that are unannounced," he tells Light Reading. "Then we have another operator that is coming very shortly in another major market."

Raleigh says ItsOn has been displacing Amdocs Ltd. (NYSE: DOX), Ericsson AB (Nasdaq: ERIC) and Huawei Technologies Co. Ltd. as it lands new deals, although he emphasizes it is not necessarily one of these players that has lost out as a result of the Telefónica Mexico deal. The operator did not want to be interviewed about its relationship with ItsOn in advance of today's announcement.

ItsOn, however, says operators using its technology can expect to realize four major benefits. The first is the ability to engage with customers in real time, giving subscribers more control over their service plans and billing arrangements. The second is what the industry likes to call "service agility" -- a means of developing new offerings, via the ItsOn cloud, in a fraction of the time it usually takes.

Related to that, the vendor also claims to be putting operators "back in the mobile commerce game," allowing them to sell other products in conjunction with their service plans.

Finally, there is the promise of major cost savings. "Our deployments are typically in two phases -- launching a new service in parallel with the existing service before moving all existing subscribers over the new platform and replacing the existing OSS/BSS," says Raleigh. "That's where you get massive cost savings."

Indeed, ItsOn reckons the biggest operators are spending about $20-30 per year per subscriber on their IT stack. "Amdocs charges AT&T about $1 billion a year just for billing, which represents about 15% of our entire platform," says Raleigh. With ItsOn, "you would be down in the low double digits of what they spend today -- a very small percentage," he says.

Want to know more about cloud services? Check out our dedicated cloud services content channel here on Light Reading.

It is this cost advantage, in tandem with ItsOn's technological nous, that makes Raleigh so confident he can take on the likes of Amdocs, Ericsson and Huawei. "If they move to a cloud model and try to compete on price they have a guaranteed reduction in revenues they cannot support," he claims.

Nevertheless, operators are undoubtedly wary of taking the plunge into digital transformation: Industry observers reckon the process of shifting customers away from legacy back-office platform and on to newer systems is fraught with risk, though clearly some operators are making the move. Telefónica, for example, has been aggressive in updating its BSS systems during the past two years, working mainly with Amdocs, Huawei and NetCracker. (See Telefónica Bets on IT Transformation, Amdocs Wins BSS Transformation Deal in Brazil and Telefónica Selects NetCracker for Massive BSS Transformation.)

The journeys on which MTN and Telefónica are embarking will clearly be worth monitoring, but Raleigh insists ItsOn has an end-to-end capability both large and small competitors currently lack.

"We are swamped with customer demand right now," he says. "We can switch millions of users per week -- 100 million in maybe months. It's a matter of how quickly they want to go."

Some notable investors are buying into the story. Last December, ItsOn revealed it had raised $12.5 million in Series D funding from companies including Delta Partners Capital, Verizon Ventures, Andreesen Horowitz and Tenaya Capital. In 2014, Cisco Systems Inc. (Nasdaq: CSCO) participated in a Series C funding round that raised a total of $20 million. (See Cisco Chips In on ItsOn's $20M Funding Round.)

"We have more customer demand than deployment capacity," continues Raleigh on his theme. "We used the funding to grow the deployment team and that is now about five times the size it was this time last year."

"We'll continue to grow global deployment and customer service capabilities," he adds. "That will be a big effort this year."

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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