OSS Giants Shift Up a Gear
Amdocs has been a mover and shaker in the billing systems world for some time, but has built itself a major position in the OSS and service delivery platform (SDP) sectors during the past few years with a number of important acquisitions. (See Amdocs Provisions $45M for JacobsRimell, Amdocs Continues Spending Spree, VCs Cash In on Cramer, Amdocs Buys Into Content Delivery, and Amdocs Buys Into Cable.)
That extended portfolio of products and capabilities has made the company an almost indispensable partner to many major carriers that are in the midst of significant back office software platform transformations. Amdocs is also striking significant partnerships with major vendors in the IT and telecom equipment worlds to strengthen its hand further. (See Amdocs, IBM Team on OSS, Turning Point for OSS, HP, Amdocs Team, Amdocs, Cisco Team Up, Major Vendors Kiss OSS, and Amdocs, IBM Team Up.)
And Amdocs isn't afraid to blow its own trumpet, having announced this week how well it's doing in the OSS market. (See Amdocs Touts OSS Success, KPN Uses Amdocs OSS, T-Mobile Austria Outsources.)
That confidence is being reflected in its financial results. Amdocs recently announced record quarterly revenues of $820 million and net income of $101 million. Analysts expect its full fiscal year (to the end of 2008) revenues to hit about $3.2 billion, and rise to $3.5 billion in the following 12-month period. (See Amdocs Reports Q3.)
With a share price around $30, Amdocs sports a market capitalization of $6.2 billion.
For comparison's sake, another well known Israeli OSS firm, TTI Team Telecom International Ltd. (Nasdaq: TTIL), has also just announced its quarterly earnings. Its second quarter revenues came in at $14.3 million, and its net income was $260,000. TTI's share price stands at $1.88, giving it a market capitalization of $30 million. (See TTI Reports Q2.)
But while TTI is a minnow compared to its giant neighbor, it's still a company worth watching. Following a troubled few years of reorganization and losses, TTI is growing, getting back in the black, launching new products, and picking up Tier 1 business again, having secured a deal with Orange (NYSE: FTE) earlier this year. (See TTI Wins FT OSS Deal and TTI Offers Converged OSS.)
Oracle builds on BEA base
Another giant making greater inroads into carrier accounts is Oracle, which, to an even greater extent than Amdocs, has relied on M&A muscle to propel itself into the OSS Premiership. (See Oracle Buys Another OSS Firm, Oracle Buys More OSS With MetaSolv, Oracle Acquires Portal, and Oracle Buying Into Service Delivery .)
With those acquisitions, particularly MetaSolv, Oracle is regularly picking up OSS deals from major carriers, most notably in Europe and India in recent months. (See Airtel Picks Oracle's OSS, OTE Deploys Oracle's OSS, KPN Goes With Oracle, Oracle Wins at BSNL and Oracle Leads OSS News Charge.)
Its most recent swoop was the $8.5 billion purchase of middleware and SDP specialist BEA Systems, a deal that closed in late April and has boosted the staffing levels at Oracle Communications, the division of the database giant that targets service providers in the telecom and cable sectors, to about 1,500. (See Oracle Flexes Its Muscle, Oracle's Higher Price Lands BEA, and BEA Touts Middleware Lead.)
Oracle moved quickly to repackage BEA's widely deployed technology, and in July unveiled its "Service Delivery portfolio," a range of software platforms that includes the Converged Application Server (formerly the BEA WebLogic SIP Server) and the Services Gatekeeper (formerly the BEA WebLogic Network Gatekeeper), in addition to presence and IP PBX/VOIP servers. (See Oracle Tackles Service Delivery and BEA Leads NXTcomm's SDP Charge.)
The overall strategy in bringing together Oracle and BEA capabilities is to tap the major carriers' desires to break into the Web 2.0 world, a move that could significantly speed up carriers' service creation capabilities but would involve interactivity between the telecom network assets and external, third-party services developers. (See BT Leapfrogs to Web 2.0 With Ribbit , Telcos Soften Up, BT Inches Toward Telco 2.0, and Aepona Expands for Telco 2.0 Assault.)
Oracle Communications is now very focused on the "converging Web and telco worlds," says Ty Wang, senior director of product marketing for Service Delivery Solutions. "There's a lot of desire [among carriers] to embrace third-party applications."
Oracle Communications's director of product marketing Ken Lee, who joined as part of the BEA team, says the Services Gatekeeper is already deployed at operators such as Telefónica UK Ltd. , Vodafone Netherlands , and Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY), and now boasts greater customization capabilities. (See SingTel Uses BEA for SDP, and Vodafone NL Picks BEA.)
Lee says the main role of the Gatekeeper product is to expose a carrier's network resources to applications developers and act as a "partner gateway," which helps to enforce policy management with respect to third party developers. "Partner relationship management is key" to carriers wanting to add Web services capabilities to their customer offerings, states the Oracle man.
— Ray Le Maistre, International News Editor, Light Reading