Amdocs OSS SOS
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Amdocs's OSS SOS Only one suitable acquisition candidate remains, and it may be expensive. Hadass Geyfman 30/5/2005 Billing and CRM company Amdocs (NYSE: DOX ) is looking for its next growth engines. In the past year, the company began operating in the finance software field and in system integration, and for more than a year it has been investing effort in developing a converged billing system. It seems however that one of the most important growth engines in the market in which the company operates is operational support systems (OSS). In recent years, most of the expenditure of telecommunications operators has been on business support systems (billing, CRM, and so on). In the near future, they are expected to upgrade these systems, and to continue investing in more sophisticated systems, but all in all, most of the operators are already equipped with business support systems. In the coming years, the bulk of the operators' capital expenditure is expected to be transferred to OSS systems. These will therefore be the main growth engines of companies like Amdocs. Moreover, in a conference call with analysts held by Amdocs management, executive vice president Eli Gelman said that "the provisioning market - inventory management, quality of service management, and so on - holds important growth opportunities for Amdocs." Since Amdocs understood more than two years ago that this was the way the wind was blowing, it set up an OSS unit at the company, which developed an ordering management system and several other products, among them a provisioning system (the system that makes it possible to upgrade the profile of every new user in the operator's systems), and activation system (which enables the user to obtain authorization and access to services), and other systems. Despite this, Amdocs lacks several critical OSS items, particularly a network resources management system, an inventory management system, and other OSS products. Since most of Amdocs's employees do not have expertise in networks, but rather in business support systems, the company has evidently had difficulties in developing by itself all the required systems in the short time-to-market. Instead, it will have to buy a company. The first, and preferred, acquisition candidate was Granite Systems, which has developed IP provisioning technology and an inventory management system. But although Amdocs offered about $100 million for Granite (about $20 million more than Telcordia offered) Granite preferred to be acquired by New Jersey-based Telcordia. Now Amdocs is continuing to seek a candidate for acquisition among the OSS companies. High on the list of the companies it has examined is Israeli company Sheer Networks , which sells OSS systems. TTI Team Telecom International (Nasdaq: TTIL ) on the other hand is not among the acquisition targets (despite the rumors that circulate on the market from time to time). Sheer Networks came under scrutiny because of the high reputation its products enjoy in the marketplace. However, it appears that Amdocs has come to the conclusion that Sheer Networks is rather small, and does not yet have a sufficiently large market share. Besides, it may be that Sheer Networks itself was not interested in being sold to Amdocs. At any rate, the remaining substantial candidate, the only one that brings with it a sufficiently large product offering and a decent market share, is London-based Cramer . This is why rumors have been growing on the market about Amdocs's intention of buying Cramer. Cramer's customers include several large telecommunications operators, such as Bell Canada, BT, KPN, Telmex, and Vodafone. Its product offering includes network resources management (NRM) and inventory management systems, service assurance systems, and other products. Amdocs is presumably aware of the fact that Granite is stronger than Cramer when it comes to marketing, in particular thanks to its worldwide deployment. Nevertheless, it seems that the only possibility available to Amdocs at present is to buy Cramer (unless it wants to buy Telcordia). OSS are monitoring and control systems that enable transactions on telecommunications networks, such as operating a service ordered by a subscriber. The job of an NRM within the OSS is to examine the resources available in the operator's systems, optimization of the network, and so on. One of the factors that could help in the acquisition of Cramer is that, according to the rumors, its management is keen to realize its holding in the company. An obstacle to the acquisition is that Cramer is estimated to be worth several hundred million dollars, and may be too expensive. Published by Globes [online], Israel business news - www.globes.co.il - on May 30, 2005 Page 120 of 822 GlobesArchive 31/07/2007 file://C:\DOCUME~1\ron\LOCALS~1\Temp\\GlobesArchive.htm
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Transcript of Amdocs OSS SOS
Amdocs's OSS SOS
Only one suitable acquisition candidate remains, and it may be expensive.
Hadass Geyfman 30/5/2005
Billing and CRM company Amdocs (NYSE: DOX) is looking for its next growth engines. In the past year, the company began operating in the finance software field and in system integration, and for more than a year it has been investing effort in developing a converged billing system. It seems however that one of the most important growth engines in the market in which the company operates is operational support systems (OSS).
In recent years, most of the expenditure of telecommunications operators has been on business support systems (billing, CRM, and so on). In the near future, they are expected to upgrade these systems, and to continue investing in more sophisticated systems, but all in all, most of the operators are already equipped with business support systems.
In the coming years, the bulk of the operators' capital expenditure is expected to be transferred to OSS systems. These will therefore be the main growth engines of companies like Amdocs.
Moreover, in a conference call with analysts held by Amdocs management, executive vice president Eli Gelman said that "the provisioning market - inventory management, quality of service management, and so on - holds important growth opportunities for Amdocs."
Since Amdocs understood more than two years ago that this was the way the wind was blowing, it set up an OSS unit at the company, which developed an ordering management system and several other products, among them a provisioning system (the system that makes it possible to upgrade the profile of every new user in the operator's systems), and activation system (which enables the user to obtain authorization and access to services), and other systems.
Despite this, Amdocs lacks several critical OSS items, particularly a network resources management system, an inventory management system, and other OSS products. Since most of Amdocs's employees do not have expertise in networks, but rather in business support systems, the company has evidently had difficulties in developing by itself all the required systems in the short time-to-market. Instead, it will have to buy a company.
The first, and preferred, acquisition candidate was Granite Systems, which has developed IP provisioning technology and an inventory management system. But although Amdocs offered about $100 million for Granite (about $20 million more than Telcordia offered) Granite preferred to be acquired by New Jersey-based Telcordia.
Now Amdocs is continuing to seek a candidate for acquisition among the OSS companies. High on the list of the companies it has examined is Israeli company Sheer Networks, which sells OSS systems. TTI Team Telecom International (Nasdaq: TTIL) on the other hand is not among the acquisition targets (despite the rumors that circulate on the market from time to time). Sheer Networks came under scrutiny because of the high reputation its products enjoy in the marketplace. However, it appears that Amdocs has come to the conclusion that Sheer Networks is rather small, and does not yet have a sufficiently large market share. Besides, it may be that Sheer Networks itself was not interested in being sold to Amdocs.
At any rate, the remaining substantial candidate, the only one that brings with it a sufficiently large product offering and a decent market share, is London-based Cramer. This is why rumors have been growing on the market about Amdocs's intention of buying Cramer. Cramer's customers include several large telecommunications operators, such as Bell Canada, BT, KPN, Telmex, and Vodafone. Its product offering includes network resources management (NRM) and inventory management systems, service assurance systems, and other products.
Amdocs is presumably aware of the fact that Granite is stronger than Cramer when it comes to marketing, in particular thanks to its worldwide deployment. Nevertheless, it seems that the only possibility available to Amdocs at present is to buy Cramer (unless it wants to buy Telcordia).
OSS are monitoring and control systems that enable transactions on telecommunications networks, such as operating a service ordered by a subscriber. The job of an NRM within the OSS is to examine the resources available in the operator's systems, optimization of the network, and so on.
One of the factors that could help in the acquisition of Cramer is that, according to the rumors, its management is keen to realize its holding in the company. An obstacle to the acquisition is that Cramer is estimated to be worth several hundred million dollars, and may be too expensive.
Published by Globes [online], Israel business news - www.globes.co.il - on May 30, 2005
Page 120 of 822GlobesArchive
31/07/2007file://C:\DOCUME~1\ron\LOCALS~1\Temp\\GlobesArchive.htm
