SAP's Rising in OSS

NICE, France –- Telemanagement World Nice 2007 –- German software giant SAP AG (NYSE/Frankfurt: SAP) is all set to follow key rival Oracle Corp. (Nasdaq: ORCL) into the telecom software market, and it may make some acquisitions to give itself a foothold in the OSS market, according to SAP executives here in Nice.

Anandan "AJ" Jayaraman, director of industry solutions with responsibility for SAP's communications industry strategy, says SAP will "play in the OSS space in time" to bolster its position as a major supplier of business process software to carriers, a business that's worth about $500 million a year to the IT firm.

But how will it gain that position? Is the market talk about a potential acquisition of telecom software firm Telcordia Technologies Inc. true? (See Telcordia Up for Grabs Again? and Is Telcordia Preparing for a Sale? )

Jayaraman says, "That's not something that's on the table just now," but an acquisition strategy could play a part in SAP's market entry. "We're still evaluating. We can buy, build or partner. All three are possible."

Buying is just what Oracle has done, and in no small measure: Its OSS purchases have made it one of the telecom software sector's most powerful companies. (See Oracle Buys More OSS With MetaSolv, Oracle Acquires Portal, Oracle Buying Into Service Delivery , Oracle Acquires [email protected], and Oracle Unveils SDP Plans.)

SAP has already flexed its acquisition muscle this month, buying Finnish IP contact center and enterprise communications system vendor Wicom Communications Ltd. for an undisclosed sum, and the company has also been developing key telecom sector relationships. (See SAP Buys Wicom and Cisco, SAP Team.)

Even if acquisition talks aren't ongoing, SAP's relationship with Telcordia is growing stronger. SAP resells Telcordia's inventory management system (formerly Granite Systems) to carriers, and on Monday Telcordia announced it has integrated its OSS with SAP's NetWeaver business tool suite. (See Telcordia, SAP Integrate, Telcordia Enhances Its OSS, and Telcordia Nearly Blew Granite Deal.)

But Jayaraman is quick to point out that "we also have a working relationship with the Cramer OSS division of Amdocs Ltd. (NYSE: DOX)," enabling carrier customers to choose between two SAP-sourced inventory platforms. (See Amdocs Unveils New OSS and Amdocs Snaps Up Cramer.)

SAP's relationships with carriers are based on sales of support tools that help to manage capex and opex processes, provide single logical views of multiple data domains (such as multiple billing systems), and what SAP calls "new business models," which include advertising management and content settlement solutions. (See Vodafone Extends With SAP and Comcast Picks SAP.)

"We've already been successful in the media sectors with these solutions, and now we're expanding into telecom. A lot of telcos are looking at how to manage advertising and see advertising as a major source of revenues in a few years' time," says Jayaraman. "We want to help telcos solve the problems they'll have in the digital economy."

— Ray Le Maistre, International News Editor, Light Reading

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