Digital transformation: How Amdocs assisting telecoms

Amdocs with support and operations services for more than 300 customers, including most Tier 1 telecom service providers has found a way to deal with current economic challenges faced by all telecom service providers.

With digital services outpacing the telecom industry in revenue growth, Amdocs is set to become the key partner for digital transformation.

The company’s study revealed that 33 percent of service providers in APAC do not have a digital strategy in place and around 69 percent in-spite of having strong technological capabilities, need at least 5 years to complete the digital transformation of their organizations and the business processes, mainly due to lack of a proper strategy, which the company plans to meet with its digital transformation component.

Amdocs will move from back office to the front line with this move exploiting digital shift while simplifying operations related to it, said a recent research report by TBR.

The company presentation to industry analysts in Boston, London and Singapore and its involvement with more than 46 transformation projects, including those with AT&T Enhanced Control, Orchestration, Management and Policy (ECOMP), Altice and Vodafone India, have clearly pointed out that Amdocs is planning on growing its business with current customers and extending its reach to new industry segments.

Amdocs, reporting a third quarter revenue of $930.1 million, up 2.4 percent from the prior year’s quarter, is likely to implement an SaaS delivery model, pay-as-you-grow billing, cloud, and open-source and vendor-agnostic solutions.

For the same, Amdocs will face challenges in moving its existing customers and new customers base from managed operations and software development position in the back office to open-source movement allowing operators to purchase a full stack of solutions from a single vendor.

Lack of history, expertise and solutions in the sector are risks for the vendors with the offering network services requiring the company to target chief technology officers, compared to the previously targeted chief information officers.

These challenges can favor selection of IT services firms for digital transformations by users but Amdocs has many advantages and is prepared to capitalize, suggests the research.

The advantages are being an OSS/BSS vendor, Amdocs is a trusted partner of companies like AT&T and Vodafone. Amdocs also possesses carriers data through analytics and services offering direct insight into service provider transformation opportunities.

The company will have to center on adding new customers in the new areas.

Amdocs, using the ownership of the user’s OSS/BSS layers will provide a distinct advantage to them by offering incremental transformations, over IT services firms, conveys the research.

By providing full-scale digital transformation to non-customers, Amdocs will compete with IT services firms such as IBM and Accenture. The Advisory Services unit of Amdocs is closely aligned with consulting services, being set up two years ago for digital transformation enabling new revenue streams.

Big data telecom operators are utilizing data monetization opportunity, with chief data officers managing loads of data for revenue generation and cost reduction.

Amdocs will be investing in data scientists to engage with chief data officers to drive business outcomes. Amdocs can drive data monetization with its OSS/BSS offering insight into data from billing side and network traffic side of an operator, with this opportunity being limited to Amdocs install base.

Amdocs offers Data Hub using open-source Hadoop code from partner Hortonworks for data extraction and processing with services to provide data management, while improving data quality interpreting and mobilizing the data to transform business processes etc., having an advantage over others with the exposure to the data.

Partnership with AT&T for ECOMP will act as a major growth driver for virtualization, with Amdocs having worked together on the same since 4Q15 with advance adoption of ECOMP on the way, globally. Also, AT&T will be open-sourcing ECOMP through the Linux Foundation, making eight million lines of code available to the telecom industry, which will be promoted by Amdocs through its services organization, offering support, training, testing, deployment, onboarding and managed services.

ECOMP is designed to be the engine that will operationalize and commercialize network function virtualization services, and is the cornerstone of AT&T’s plan to virtualize 75 percent of its network by 2020, conveyed Amdocs during its last revenue report.

Amdocs can achieve the open-source movement and add its VNF certification and NFV Suite integrated with ECOMP, with familiarity to ECOMP being a plus over rival systems integrators not involved in creating the code, and can try to bag users of the likes of Ericsson or Nokia.

ECOMP adoption among Tier 1 operators in developed markets is unlikely as their complex networks will require their own custom-built code for managing virtualized environments, but there will be opportunity for Amdocs among Tier 2 and Tier 3 operators and even some Tier 1 operators in developing markets, as per TBR research.

The latter group can be lacking in resources and may be unable to afford costs to develop proprietary management and orchestration for virtualized environments or may be among the comparatively late adopters of NFV and SDN.

Amdocs also plans on cloud strategy, after establishing a Cloud Center of Excellence for cloud innovations, while also being engaged with cloud vendors and its customers, like VMware, Red Hat, Mirantis, Cloudera, Amazon Web Services, IBM and Hewlett Packard Enterprise on the supplier side, and AT&T, Vodafone and Telefonica on the operator side, as a trusted design partner.

While a product line a cloud native solution may be announced only by 2018 or 2019, Amdocs is relying on the comfort level of its service provider customers for moving to advanced cloud options. Amdocs staged its virtualization on VMware, based on customer viewpoint.

Amdocs needs to overcome hurdles related to cloud rather than using the pragmatic strategy which will slow down its move to digital transformation leadership. This can be boosted by the roll-out of new applications such as cloud-native business-to-business digital solutions.

Also, mobile banking is another opportunity, with TBR estimating about 5 percent of the total revenue of the company coming through it, and a market opportunity of 2.5 billion unbanked or under-banked people in the world. Currently, Amdocs offers its primary service, MFS, to over 30 customers worldwide, most of which are telecom operators in the Middle East and Asia.

Amdocs, in-spite of facing challenges to compete with IT players for net-new projects can play to its advantages to win transformation business with its OSS/BSS customer base, while struggling with its current customer perception.

Vina Krishnan
[email protected]