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CSP brain drain raises barely a ripple as vendor CEOs avoid the splash back of M&A rumour mill
George Malim, Editor: VanillaPlus
As usual there’s been a reasonable amount of gossip about mergers and acquisitions in the telecoms software market. There’s something about the summer season that seems to suggest that if you put a chief executive by a pool, buy and sell rumours proliferate, like so many fat kids dive-bombing the deep end. A big splash, diminishes to a barely detectable ripple, calm is restored and the serious business of improving the suntan continues.
Now the silly season is over, it’s time to assess what, if anything, of substance is going on. First item on the agenda is Nokia Siemens Networks and what it might do with its BSS business. The vendor needs cash and appears to prefer to focus on its small cells strategy rather than devote time and money to BSS. Ericsson and Amdocs have been mentioned as suitors – perhaps because they’re big enough to buy the assets, rather than because they need the technology. Amdocs itself has been linked with Microsoft over the summer season. Microsoft has tried hard and often to crack telecoms with some success but it may see value in a partner that can bring it greater industry-specific heft. What is becoming clear is that telecoms software procurement has changed, probably forever. Network equipment vendors are either piling in to OSS/BSS or getting out. Ericsson and NEC are notable for their commitments to building their portfolios. The traditional IT vendors have taken similar approaches coming from the IT side of the Venn diagram that centres on telecoms software. That leaves a select group of telecoms software specialists still independent of network equipment or IT vendors. Amdocs is probably the largest of these, although CSG International and Comverse are substantial businesses with sufficient scale to remain independent. All these machinations, along with ever-present consolidation among smaller vendors, illustrate how procurement is changing. Intelligence is shifting from the CSP to the vendor. The summer season saw five-year deals done by Amdocs with TIM Brasil and Subex with MTN. Professionals who would have been employed by CSPs now work at vendors and the brains are draining away from them. Some, of course, are being retained to maintain management insight into the performance of long-term deals but CSPs are de-skilling. Should that be a concern for the CSP CEO? Absolutely not; they’re shifting expensive headcount to their suppliers and gaining access to innovation and the economies of scale managed services providers can deliver. It’s the mere clink of ice in a long, cool drink. It’s the vendor CEOs that have to deal with the waves caused by the belly flop from the big board.
EDITOR George Malim Tel: +44 (0) 0208 292 4036 george@vanillaplus.com DIGITAL EDITOR Nathalie Bisnar Tel: +44 (0) 1732 808690 nathalie@vanillaplus.com
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VANILLAPLUS AUGUST/SEPTEMBER 2012
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EDITORIAL ADVISORS
John Aalbers, chief executive, Volubill
Dan Baker, Research Director, Technology Research Institute
Martin Creaner, president, TM Forum
Andreas Freund, VP Marketing, Orga Systems GmbH
Louis Hall, chief executive, Cerillion Technologies
Gabriel Matsliach, general manager, BSS Product Line, Comverse
Pat McCarthy, VP of Global Marketing, Service Delivery Solutions, Telcordia
Simon Muderack, COO, Tribold
John Rainger, vice president, EMEA, CSG International
Mac Taylor, CEO, The Moriana Group
Chris Yeadon, director of Product Marketing, Ericsson
Dr Reinhard Zuba, CMO, Vipnet (Telekom Austria)
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