Succeeding Despite the Downturn

As is the case with most topics that receive national, mainstream media attention, telecom’s depression has, in a sense, been overstated. Money does not simply cease to be spent in a trillion dollar, global industry regardless of what the media might report. In fact, more than 750 North American OSS and billing contracts have been announced since 2000. This likely means even more contracts were won but were never permitted to be announced. While billing and customer care contracts were most prevalent, plenty of significant OSS deals have been signed as well and seem to be a harbinger of greater activity that has begun to emerge. The winners are not surprising in most cases, and the reasons for their wins are practical and identifiable.

Agilent Wins Big at Sprint

Earlier this year, Agilent Technologies announced a $30 million expansion of its presence within Sprint. To the outside observer, this deal may have appeared to be a contract renewal and extension as opposed to a new win. In reality, this deal was a major triumph for Agilent that is likely to secure its future within Sprint for many years to come.

As is the case with most Tier 1 carriers, Sprint is undergoing a massive consolidation initiative, know as One Sprint. The company has compressed responsibilities under one roof and literally cut layer upon layer of middle and senior management out of its IT organization. Rather than running its operations as unconnected stovepipes, each managing a different technology or service, the company is moving toward a common OSS base for all. Sprint continues in this massive transformation and is re-evaluating just about every IT system and vendor in the company.

For Agilent, this re-evaluation was a matter of life and death for its Sprint account. It would be an all or nothing deal. “In moving to this One Sprint environment, they took a best in class approach from what was deployed in different areas—the intention was to consolidate. There were a lot of different vendors. They looked at each specific area and, in general, stuck with systems they already had and expanded their footprint. This was a major deal for us,” says Donna Bastien, worldwide OSS marketing communications manager at Agilent. Agilent would either become a core part of the new, consolidated OSS base, or it would be phased out as many others have been and continue to be. When Sprint assessed its entire environment, it saw that it had elements of Agilent’s product line—NetExpert, Firehunter, and Access7, for example—in production in a number of operational areas. It made sense to leverage these existing systems, and Sprint chose to expand their responsibilities into new areas that would require similar functions Agilent already proved it could deliver.

The key to Agilent’s expansion, however, went well beyond product. Product functionality alone rarely wins an OSS contract. There are many more practical considerations that come into focus, such as the maturity of the vendor and its ability to service a large-scale company. Many small vendors simply do not have the mechanisms, people or resources in place to be a technology partner—as opposed to a mere seller of software—for a Tier 1 company. Agilent is one of the few that does. Its proven ability to engage and support multiple groups within Sprint, and its understanding of multiple aspects of Sprint’s business and operations, gave Agilent an advantage and makes the company a suitable partner for Sprint going forward.

Further, consolidation is expensive. Agilent was willing to spend the dollars necessary to integrate its product line for Sprint—and now for general market purposes—hence making an investment in the relationship and helping to defer some of Sprint’s cost and effort. This is a sign that the OSS market’s leaders are listening to carriers who have been asking vendors for several years to spend more on their own products and charge less to implement, integrate and maintain them.

Granite Takes the U.S. Wireless Market by Storm

The mobile market proved to be extremely lucrative for the handful of winners, but few found more success than Granite Systems. While numerous mediation vendors such as Intec Telecom Systems, Comptel, Openet and Xacct, won large deals to support next-generation mobile offerings, Granite was the most successful inventory and provisioning vendor to land the big fish.

The defining victory came last year when Granite was granted a full site license with AT&T Wireless. Granite had been deployed within AT&T Wireless on a limited, regional basis. The site license meant the company’s core Xng product would become the trusted source for provisioning and inventory data for AT&T Wireless’ entire operation. Granite went on to earn business with both Verizon Wireless, which is undergoing a national rollout of Granite’s products, and most recently with Cingular Wireless. On the latter, Granite is the prime contractor and is managing Cingular’s national implementation of its platform. Granite is beginning to demonstrate that it has the maturity and experience to service Tier 1 customers directly and can effectively be the “one neck to grab,” explains Mark Mortensen, Granite’s chief marketing officer. Few OSS vendors have been able to grow organically as Granite has and reach each maturity milestone on the way from development shop to viable technology partner. In addition to having the kind of product that hits the core of a carrier’s operational needs, it is this apparent maturity that allowed Granite to earn its way into large carriers’ trust.

Telution Demonstrates a Business Transformation

It is a general rule of nature that the key to long-term survival for any species is its ability to adapt to, and in some cases manipulate, the environment in which it lives. Telution, a company created to tackle the CLEC market, was literally faced with an “adapt or die” situation. “We had to move our technical assets, professional services and the way we go to market to something that was more consumable for the Tier 1s. We had to transform how we go to market in order to be credible. We had to sell into the Tier 1s the way they needed us to,” says Kent Steffen, Telution’s CEO.

Realizing this change had to occur was the first step towards survival and eventual success. Out of Telution’s transformation came a highly publicized deal whereby Telution worked in conjunction with Z-Tel to build out a full service, outsourced UNE-P platform to assist Sprint, among other large carriers, in entering the local market. This success has since opened doors into further Tier 1 projects for Telution, largely centered around building out complex transactional systems that automate sales and other customer-facing functions and processes.

Many OSS companies that looked to shift markets made the mistake of selling into Tier 1 carriers the same way they had successfully sold into the CLEC market. As a result, even good technology companies looked lost as they knocked on all the wrong doors and met with significant resistance. While many CLECs were eager to spend venture dollars on sophisticated automation systems, most Tier 1s were, and sometimes still are, hesitant to adopt automation technology. This hesitation is largely a result of big carrier politics and individuals who fear losing their jobs. When OSS vendors are not sensitive to these factors, they reveal their immaturity regardless of product strength. By the same token, large carriers often are not helpful in educating potential suppliers on how to approach their organization. While this will dissuade the “tire kicker” from wasting people’s time, it also means that carriers can miss the opportunity to see and perhaps adopt differentiating technology that may be available from small, but skilled and financially viable, OSS vendors.

This is essentially a sign that the OSS market is continuing to mature but is still somewhat disorderly. Many OSS vendors still need to mature in a way that says let’s offer the customer what they want, how they want rather than selling a grandiose vision that may or may not coincide with the carrier’s operational roadmap. Too many OSS vendors make the mistake of positioning themselves as strategists rather than solvers of the toughest tactical challenges. Tier 1 carriers don’t need some little OSS vendor telling them their investments in strategic consulting are leading them down the wrong path.

Info Directions Says Don’t Just Sell, Be a Partner

One example of a company that was designed for Tier 2 and 3 carriers and did not change its business model as a result of the downturn, but has matured into a disciplined, organized technology supplier, is Info Directions. In terms of pure number of implementations, Info Directions’ CostGuard is the most installed billing platform in North America. It is arguable that the success of its billing platform has lead directly to its customers’ success, which made it possible for both Info Directions and its customers to survive. Info Directions has announced more than a dozen new customers since 2001 plus several Tier 1 accounts that have remained unannounced at the customers’ requests.

Info Directions has always been a self-funded and profitable company, going back to its initiation around 1996. One of the keys to its continued success, says Derrick Van Grol, vice president of sales and marketing, has been its financial viability and flexibility. “Price is still a major issue out there. We have a lot of confidence in what we do, and we’ve been known to take a gamble by spreading out the cost of implementation... It’s been important to be able to take those gambles, and we wouldn’t if we didn’t have confidence in our product and services,” he says. While many in the industry will pay lip service to being a solutions partner, as opposed to a software supplier, few will put up the dollars to back up their words.

Being a partner means not hitting a carrier with financial concerns over the head with a massive license fee. Carriers are refusing to pay astronomical prices for software that hasn’t been delivered, so despite rising optimism it is more important than ever for vendors to demonstrate that they have the financial wherewithal to work with customers and share, or at least float, some of the initial costs to implement, configure and integrate a product. It is also the carriers’ responsibility however, to have a better picture of what they need before making vendors jump through hoops. Too often carriers are indecisive and vague about their requirements. This results in lengthy evaluation cycles that cost the carrier, and their potential suppliers, far more money than is necessary. People moving at market speed won’t take the time to define what it is they’re looking for before they begin looking. This usually results in redundant efforts or projects that are cancelled before they ever get off the ground. OSS vendors bear the brunt of this as their cost to sell, which means those dollars aren’t going toward innovation and enhancement for the carriers’ collective sake.

The Secrecy Debate

The problem with many OSS deals is that the highest profile contracts go largely unannounced. While smaller carriers are interested in earning press coverage from just about any positive angle, Tier 1 carriers are far more secretive. In many cases they simply will not allow their vendors to announce they’ve implemented a system, much less that they won a contract. This is not helpful to OSS vendors who, as a result, cannot discuss their most legitimizing wins without a strict NDA in place. Carriers often roll out the line that they consider OSS such a potent differentiator that they are unwilling to reveal their secrets. This is the simple party line. The truth is that buying an OSS product is not the differentiator—applying it effectively is. No two carriers will use the same product in quite the same way. People, processes and the ability to execute are differentiators. Announcing the successful implementation of an OSS platform does not mean the carrier has to show its internal working to the whole world.