Consolidation in the telecom BSS/OSS market is accelerating as large telecom IT vendors continue to expand and enhance their existing product portfolios to meet telecom operators' growing need for quick service launches and multi-play services deployment.
Last month Amdocs and Comptel announced plans to acquire fulfillment specialists - Jacobs Rimell and Axiom Systems, respectively - in a bid to strengthen their position in the service fulfillment sector.
Ari Banerjee, program manager for enabling technologies at Yankee Group, says both Jacobs Rimell and Axiom Systems provide cutting-edge product assembly techniques, and this will help the two established vendors to cope with complexity of horizontal service creation platforms and respond to service velocity in real-time or near real-time.
Despite the similarity, there are strategic differences behind the deals.
The $14 million takeover of Axiom Systems, says Banerjee, is aimed at making Comptel's fulfillment offering more robust and providing more flexibility.
'Comptel's solution, which consists of assets from its Incatel acquisition, is more useful in siloed fulfillment old-school environments, but Axiom's IP fulfillment solutions like order management and active catalog are very modernly architected and are better than Comptel's.'
He says Axioms' solution can be used in complementary settings to the overall fulfillment suite of Comptel's solution, and in some cases Comptel can even upsell Axiom's active catalog to their existing customer base to provide their clients with efficient product assembly environment.
The $45 million Jacobs Rimell acquisition, meanwhile, is to bloster Amdoc's cable fulfillment portfolio, providing innovative product assembly techniques to meet operators' current and future product assembly needs.
'Telecom-specific information modeling has been an area of major focus for Jacobs Rimell and with that they have been able to provide innovative product assembly techniques to meet operators' current and future product assembly needs,' Banerjee notes.
For Amdocs, the immediate benefit is to get Comcast as its OSS customer.
'Amdocs already has Comcast's billing solutions, and this acquisition will enable Amdocs to own both the OSS and BSS piece of the cable giant,' Banerjee says.
Gordon Davies, who heads development of next generation IT at Analysys, says the deal will also help Amdocs expand into the enterprise VoIP market, which Jacobs Rimell started to crack into with the launch of its Quickstart business product in 2007.
As part of its integration of Jacobs Rimell's portfolio, Amdocs, however, will have to address several hardware and software partnership issues, not least Jacobs Rimell's preference to deploy BEA Systems middleware on Sun Microsystems servers, given that Amdocs enjoys a close relationship with IBM and that Oracle has acquired BEA, Davies notes.
Meanwhile, he expects more M&A activities in the telecom BSS/OSS market this year, driven by the growing need for data migration tools and product catalogues in emerging markets.
Banerjee, meanwhile, believes the pace of vendor consolidation will slow down a bit because of limited choices available in the market. 'NetCracker has been in the market for a while but no one is picking it up. I think it might be the next one to be sold,' he predicts.