One of the realities of the OSS/BSS business is that CSPs are often reticent regarding their choices of supplier. Few want to be seen as publicly endorsing their own vendors, for a variety of reasons. Confidentiality is usually baked into a contract, so when a vendor gets to announce a customer, there’s usually a pretty high comfort level on the CSP’s side about its commitment to the vendor. That’s why NetCracker’s recent flurry of contract announcements – like Swisscom, Sprint, KDDI, and Singtel – nabbed my attention. A chat with NetCracker VP of Strategy Sanjay Mewada further expanded my purview.
16 Face Up and Another 16 Face Down
Since NEC, NetCracker’s parent, announced a year ago – on March 22, 2012 – that it would acquire Convergys’ Global Information Management business, NetCracker has announced deals with 15 different CSPs across telco, cable, and mobile markets and one power utility in the North America, Europe, Asia, and CALA regions. The table below provides a quick summary.
Mewada says that though these 16 deals were publicized, “there’s an equal number that have not been announced” which translates into “a deal every other week since the acquisition.” These deals span global regions and range from NetCracker’s traditional, network-facing OSS solution implementations, to BSS transformation programs, to upgrades and extensions with existing NetCracker and Convergys customers. Part of the reason for this diversity of wins, says Mewada, is that NetCracker’s approach to the market is “not one size fits all; it’s what their needs and requirements are and being flexible enough.”
NetCracker’s ability to win business bears itself out, given the organic growth the company has achieved since its start-up days in the 1990s. The detail to note amidst its current surge, however, is as Mewada says, “Convergys customers are re-signing long term deals.” Examples of such long term extensions include Suddenlink and MidContinent Communications.
Since the acquisition, NetCracker has been playing defense against an inevitable campaign of “FUD – fear, uncertainty and doubt,” says Mewada. Competitors posit that the company lacks BSS expertise or commitment to the BSS business. But as has been noted since the acquisition, what was the largely under-resourced Convergys IM business ultimately has a better parent in massive NEC, and better leadership under NetCracker. So, while the in-transition pot shots are opportunistic, and all is in fact fair in love and market share warfare, NetCracker’s robust deal flow is evidence that the company is operating healthily within NEC’s universe and beginning to leverage the investment it made in Convergys’ BSS assets.
Why does it matter?
This all bears watching because it’s unfolding before the backdrop of major network equipment providers acquiring large BSS/OSS players. Among the acquired, NetCracker is the only BSS/OSS company to remain independent under its new parent. NetCracker’s ability to win business across the globe, across industry segments, at various levels of carrier scale, and in a variety of project or program scopes, speaks to the economies of scale, leverage, and global force projection it enjoys with NEC in the background. Though Mewada admits that most CSPs are “still a little reluctant to give everything to a single vendor,” he observes that we’re seeing a trend in networking that we’ve seen previously in computing. Intelligence is moving out of the network hardware and into the BSS/OSS software layer, as evidenced by technologies like software defined networks (SDN). As that trend continues, it may position companies that can demonstrate both network and BSS/OSS domain expertise particularly well. In fact, NEC has made large bets on exactly that and, thus far, it appears to be paying off.