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Amdocs aims to lead the service provider IT market


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  • 1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR EVENT PERSPECTIVE Amdocs aims to lead the service provider IT market Amdocs InTouch Annual Customer Event San Diego; Nov. 13-14, 2013 Author: Michael Sullivan-Trainor, Networking & Mobility Practice Executive Analyst ( Operating from a dominant position in OSS/BSS, Amdocs is targeting an expanded market footprint driven by investments in customer experience management. This was the primary message of the company’s InTouch 2013 customer event held in San Diego. Amdocs’ growth is most evident in services, which provides more than 95% of the company’s revenue. Its growth already places it among the leaders in managed services as measured by TBR’s Telecom Infrastructure Services Benchmark — a position that is likely to expand as industry trends favor the company’s software-led services strategy. Ten Largest TIS Suppliers: 2Q13 Managed Services Revenue (Billions USD) TBR 50% Huawei Year-to-Year Revenue Growth 40% 30% Amdocs China Comm Services 10% 0% $-10% Ericsson SAP 20% $0.15 Alcatel-Lucent $0.30 Accenture $0.45 $0.75 HP -20% -30% $0.60 IBM NSN TIS Managed Services Revenue NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR AND COMPANY DATA $0.90 $1.05 $1.20
  • 2. TBR Amdocs Services has evolved from a set of offerings around its own products to a prime service contractor with managed services supported by a global operation infrastructure in eight centers across all regions (the U.S., Canada, Brazil, Israel, India, Europe, Philippines and Australia). The company operates on a traditional service model where scale and scope are required to grow revenue and profitability. Supported by investments in tools and staff, Amdocs is expanding as the services supplier for all IT operations in the service provider market. The company’s services growth is centered around Customer Experience Services (CES), a comprehensive suite of OSS/BSS modules on a common execution platform. CES version 9 was released in May after a nearly $200 million investment in product development. Earlier versions of the platform essentially run the OSS/BSS operation of many Tier 1 service providers, with a dominant position in North America. CES 9, which was built to run on a VMware virtualized platform, is being deployed by several customers, and the migration will continue among Amdocs’ global customers. The upgrade to CES 8 added policy management (based on Amdocs’ acquisition of Bridgewater), proactive services for analytics and multichannel capabilities as well as improved scalability and resiliency to support the upgrade cycle. CES 9 includes the ability to execute OSS/BSS transaction for more than 100 million subscribers in a single system, contributing to Amdocs’ claim that it manages 7 billion events a day, a figure that is estimated to grow to between 12 and 15 billion over the next few years. The company contrasts this capacity with Google’s ability to support 8 billion searches a day. The complexity of CES and its place in the market are a double-edged sword for Amdocs. Upgrades are slow in Internet terms, taking six to eight months, yet CES is the primary system relied on by many Tier 1 companies — and they trust Amdocs to remain up to date and deliver upgrades on time. The company’s 94% project success rate, compared to the industry standard 70%, testifies to its success. Another positive factor for Amdocs is its position at the heart of the service provider network, which places it at the center of key trends. The company must develop solutions for new cost-saving or revenue-generating technologies because nearly all aspects of the service provider business touch the OSS/BSS systems. In this context, Amdocs is expanding its software and services capabilities. The company presented the following new solutions at the event:  Pervasive Policy Ecosystem — an ecosystem of partners that leverages Amdocs’ policy and charging capabilities and pre-integrates partner solutions for analytics, notification, deep packet inspection and optimization to deliver end-to-end policy from the device to the OSS/BSS; closing the gap between the network and network end points and the OSS/BSS is a major continuing direction for Amdocs, and policy is a key element.  Amdocs Cloud Convergence — a prebuilt, self-service OSS/BSS solution for Mobile Virtual Network Operators (MVNOs) or for MVNEs to use directly from Amdocs as a managed service; the solution provides the key order creation, activation and billing processes in a multi-tenant hosting environment for small subscriber bases. This solution enables Amdocs to address lower tier and MVNO service providers that otherwise cannot take advantage of CES. pg. 2
  • 3. TBR  Amdocs Small Cell Solution — the small cell solution is a catalogue-driven small cell rollout service that optimizes the location of small cells based on subscriber and network characteristics. The solution can be extended beyond small cells but currently addresses the service provider to cost effectively deploy large amounts of small cells (not including femto cells). The solution will incorporate Amdocs’ Actix and Cellcite acquisitions, enhancing the ability to manage multivendor small cell deployments with the intention of linking the solutions to OSS/BSS data for greater leverage, such as targeting small cell deployment for the high-value subscriber.  Amdocs Smart Net — using similar methods but leveraging different products, namely a Smart Connection Manager and Controller, the solution detects subscriber activity to provide intelligent offload of traffic to Wi-Fi to improve network efficiency and improve the customer’s network performance for data access.  Amdocs Services — among other services, the company showcased its Order to Activation solution that leverages the company’s Order Management Center to increase service provider order efficiency and management. The company is promoting the concept of Value Process Operations rather than Business Process Operations. These operations are aimed at increasing the value of processes by delivering greater efficiency or allowing faster time to revenue through process automation and speed of execution. These solutions are entry points into areas where software extensions of IT functions begin to influence service providers’ abilities to improve the deployment and management of the physical network. As such, they represent new territory for Amdocs and are just the beginning of expansion, though Amdocs pledges never to get into the hardware business. Major drivers for Amdocs investments were outlined by CEO Eli Gelman. These included:  Connected devices — managing and delivering network functions in a seamless fashion across devices and catering to network bandwidth requirements for everything from smart devices to M2M  Consumer empowerment — providing prepackaged and customized bundles of more than communication services, including Internet, content and new value-added services such as home surveillance  SMB requirements — solutions that cater to the self-service needs of small and medium businesses, while also providing the flexibility to allow the SMB user to switch personas to an individual user with personal preferences  Mobile financial services — supporting mobile financial services in emerging markets with greater BSS flexibility, while promoting the services’ adoption in mature markets  Video — multichannel video based on seamless device experiences for telecom, cable and satellite service providers; AT&T, Comcast and DirectTV are major Amdocs customers that require flexibility in delivery of multichannel/multiplay services  Big Data — proactive analytics to improve the customer experience delivered across an end-to-end framework pg. 3
  • 4. TBR  NGN — next-generation network optimization and policy management to improve efficiency, support quality of service and offer flexibility  Cloud — network function virtualization to improve system flexibility and reduce costs Amdocs continues to make advancements in each of these areas, following its consistent evolutionary path to offer more capabilities with its products and services. Additional capabilities will appear in future versions of CES 9, but acquisitions and partnerships in parallel products are also key to the strategy. Amdocs is committed to leading the service provider IT market as a full-service player. Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit ©2013 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce. pg. 4