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OSS/BSS

Optiva CEO seeks a 'second life' for cloud BSS specialist

Danielle Royston, the charismatic CEO of BSS vendor Optiva, is on a mission to turn what was a traditional telecom charging software company into a public cloud-based charging solution services player and, after $28 million of R&D investment, she is part of the way to her goal.

The question is, will investors give her the support, money and time to fully transition the company?

Royston has spoken before about how, to rebuild Optiva (formerly Redknee), the financials will get worse for a while, as traditional customers that use hardware-based BSS systems either go elsewhere or shift to the company's public cloud-based offering.

But things aren't moving fast enough.

In its most recent quarter, Optiva's revenues were down year-on-year by almost 26% to $20.5 million, while the previous year's small profit turned into a $16.9 million loss.

Royston's plan involves further investments of $72 million in cloud-oriented product development over the next two to three years to position Optiva as a pure public cloud play. "We have first-mover advantage and we want to maintain that," she tells Light Reading. "Legacy system customers are not leaving as fast as they were. We need to invest to change everything to be cloud-focused … we need [to invest] $100 million to do the whole job."

The CEO adds: "We have shown our customers we have the skills to run a business, and we are looking to give the business a second life. We want to push the accelerator, not apply the brakes."

The company already has customers shifting towards its vision of public cloud-based systems: In India, Vodafone Idea has initiated a pilot deployment of the "cloud-native" Optiva Charging Engine on its Universal Cloud platform, supporting more than 4 million subscribers and processing 1,000 transaction units per second (TPS) for online charging data. But that, as noted previously, is running in Vodafone Idea's private cloud, which Royston likes to call "fake cloud," though the Indian operator has stated that migrating to the public cloud is a future option.

She proclaims that the true operational and cost benefits come from public cloud deployments, where the operator is not having to run any of its own IT infrastructure, and it has some customers using that model.

One is Truphone, the international MVNO, which is migrating some of its customer base current to Optiva's charging system running on the Google Cloud Platform and using the Google Spanner database platform.

Truphone CEO Ralph Steffens says the shift to public cloud was prompted by the business case of providing IoT connectivity, something that the company has been building up in the past few years. "Telco charging systems are designed for high ARPUs and the [traditional] BSS systems come with high license fees. As we got into IoT is became obvious the cost base was different – we needed a system for ARPUs at 50 cents instead of $50." Truphone has started its migration and believes it can achieve total cost savings of more than 40% compared with a non public cloud-based deployment, saving the company millions of dollars per year in operating costs.

But will there be enough customers like Truphone for Royston to get the support she needs from investors? "Three years ago the company was on the verge of bankruptcy and now we have people fighting to give us money … everyone's excited about where we are going." The problem is, the investors with the money aren't necessarily in agreement about how to get there.

Royston's new, even more aggressive plan, announced in January, resulted in a request from shareholder Maple Rock Capital Partners for a special meeting where it would propose two new board members, a move the CEO opposes. "We have shareholders that would like to give us money but we are not in total agreement" about the new plans, says Royston.

The special meeting is due to be held at the same time as Optiva's annual general meeting, on May 12. Whether that takes place in person, or virtually, that looks like a pivotal meeting for Royston's efforts to turn Optiva into a pure cloud-based solutions provider during the next decade.

Market trends and sentiments are with Royston's vision of public cloud-based applications hosting – Microsoft's acquisition of Affirmed Networks is the latest example of the telecom sector's shift towards public cloud-based functionality – but whether customers and investors are ready to move at the pace the CEO wants is still open to question.

For more on this topic, see:

— Ray Le Maistre, Editor-in-Chief, Light Reading

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dansom1 4/1/2020 | 6:56:06 AM
Good read Interesting read.

 

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