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Nice Show: Management World 2010

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
5/27/2010

At the recently concluded TM Forum Management World 2010 conference at Nice, the focus was unsurprisingly on providing flexible and efficient software solutions and improving customer experience. Key takeaways from the show are listed below.

Back to best of breed
One of the themes that came out during sessions and in our discussions with communications service providers is a desire to go back to a "best of breed" approach for solutions. Certain sections of operators seemed keen on productized solutions and not relying completely on one vendor for all solutions. Clearly this was only one side of the equation, as there were quite a few incumbent operators in mature markets that talked about their dependency on very few handpicked software vendors.

Exponential growth in bandwidth demands new paradigm
Many of the discussions, including the panel I did with Telus Mobility and Netcracker Technology Corp. , revolved around bandwidth challenges, how over-the-top (OTT) players are threatening to undercut service providers' traditional business, and how the steep cost of providing mobile services – be it on 3G, 3G+, or 4G – is resulting in the erosion of core revenue. Central to the discussions were looming external factors such as net neutrality, increased competition from alternative service providers, dwindling revenue from traditional voice services, declining ARPUs, and the exponential growth in bandwidth demand. To survive these tumultuous conditions and continue to thrive in an evolving market, established operators must reconsider how they manage network traffic, move beyond flat-rate service models to tiered and personalized services, and reconsider their core revenue streams. Not surprisingly, policy management and real-time convergent charging solutions were discussed at length at the show. Key vendor messaging around this topic came from Amdocs Ltd. (NYSE: DOX), Comptel Corp. (Nasdaq, Helsinki: CTL1V), Convergys Corp. (NYSE: CVG), Openet Telecom Ltd. , Telcordia Technologies Inc. , and Volubill .

Enabling decision-making at the speed of business
Most BSS vendors – such as Amdocs, Comptel, Convergys, HP Inc. (NYSE: HPQ), Oracle Corp. (Nasdaq: ORCL), Telcordia, and Volubill – talked about how they can ensure service providers' profitability by arming them with the tools to comprehend and capitalize on customer insight in real time. BSS vendors discussed the need for prepaid and postpaid convergence as a key mechanism to drive adoption for value-added services in next-generation networks. Effective use of analytics coupled with online charging is viewed as a critical requirement for most carriers looking to roll out more innovative and personalized service offerings. Dynamic real time, or near-real time, offers management capability based on subscriber network usage, traffic-based promotion, loyalty points, and event-based promotion, and rules-based promotion will be critical for BSS vendors.

Cloudy with some rays of sunshine
Monetizing the cloud was a hot topic at the show. In my opinion, there was a lot of noise around monetizing cloud infrastructure, but relatively less around challenges in security, privacy, governance, and service management issues in the cloud environment. Oracle led the bandwagon around cloud monetization and its impact on BSS discussion at the conference. Though cloud infrastructure is to some an overhyped topic, there was some impressive thought leadership from Oracle on this topic at the show.

Evolution of enterprise product catalog
Interest in enterprise product catalog – Amdocs, ConceptWave Software Inc. , Convergys, IBM Corp. (NYSE: IBM), Oracle, Tribold , etc. – continued to gain momentum even this year, but with a slight twist. Most communications services providers are viewing catalog as having the ability to provide that optimum customer experience by unifying their back-office systems. By linking disparate CRM, BSS, and OSS functions, service providers are aiming for an end-to-end view of their subscribers and services. The key question now raised by many operators is whether enterprise product catalog can accommodate the complexity of bundled products and self-managed products or services. Can centralized catalog now be used to extend existing CRM solutions? My answer is, "Yes – it has to." CRM solutions have been inflexible and expensive to modify or replace. Enterprise product catalog can easily be an adjunct solution that can sit between CRM and order management, and can help with creating custom packages quickly. This will also help in eliminating hard-coding within the order management application.

Data integrity for end-to-end assurance
The importance of data integrity, and how that can act as a catalyst for end-to-end assurance, came up very prominently in our discussion with vendors such as Ontology Systems and Subex Ltd. This is an extremely important topic, as operators have traditionally turned to system integrators to help them with their data integrity problems. The semantics-based approach from Ontology can help operators do the same thing, at a significantly lower cost. Subex also talked about this problem and how it is handling revenue assurance problems by solving data integrity issues.

— Ari Banerjee, Senior Analyst, Heavy Reading

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abanerjee
abanerjee
12/5/2012 | 4:34:35 PM
re: Nice Show: Management World 2010


Yes absolutely. Network Operators are showing a lot of importance in their cloud intitiatives and buildout. Not surprisingly on the supply side Network equipment manufacturers, ISVs and Systems Integrators have responded to this demand. Cloud Computing was an area of big focus at NSN conference at Nice and IBM conference at Stamford, CT I had recently attented.

shygye75
shygye75
12/5/2012 | 4:34:35 PM
re: Nice Show: Management World 2010


It seemed to me that operators at the show were still more focused on cost reduction than on revenue expansion through cloud initiatives. Sounds like your more expert radar is detecting a shift in thinking and strategy. Do you see any specific operators or regions that will take leadership in rolling out cloud services?

shygye75
shygye75
12/5/2012 | 4:34:35 PM
re: Nice Show: Management World 2010


Are network operators as gung-ho about cloud initiatives as vendors like Oracle?

abanerjee
abanerjee
12/5/2012 | 4:34:34 PM
re: Nice Show: Management World 2010


I agree that cost reduction is definitely the primary driver in most cases however I am seeing tenets of revenue generation initiatives from operators as well though they are in early stages. Early examples which have the potential to spread in the future are - service providers providing SMB customers to employ open-source API-based cloud technology to manage his entire supply chain and improve business performance, SDP in cloud initiative to provide revenue generating services in an distributed environment etc . In my opinion certain APAC operators are ahead in their thinking process.  




bobmachin
bobmachin
12/5/2012 | 4:34:29 PM
re: Nice Show: Management World 2010


Good summary Ari. Other analysts have also reported growing enthusiasm among the carrier community for investing to grow revenue, which has to make sense - outside of planet OSS this is an incredibly vibrant time for communications in terms of devices, services, networks... it's not a period of stagnation when it makes sense to batten down the hatches and just concentrate on costs. Carriers can still get a piece of this but they have to make themselves agile enough to bend with the wind and create new products and partnerships as revenue opportunities start to emerge, and catalog approaches - as we see in other fast-moving industries - seem like a key part of this evolution.


Regarding Cloud service provision specifically, did you get a feel from carriers as to how Cloud service initiatives will impact on their OSS strategy in terms of having to extend, replace, enhance their existing service fulfillment, charging and management platforms?

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