Modern inventory management systems: pricing models and market review

Transcription

1 Research Report Modern inventory management systems: pricing models and market review January 2014 Mark H. Mortensen and John Abraham

2 2 Contents Slide no. 6. Executive summary 7. Executive summary 8. The modern inventory management systems innovation adoption curve 9. Recommendations 10. Recommendations for CSPs 11. Recommendations for suppliers 12. Market definition 13. Telecoms software market segmentation 14. Service fulfilment sub-segment definitions 15. Inventory management 16. General requirements of modern inventory management systems 17. Traditional fixed service fulfilment information flow 18. Modern service fulfilment information flow 19. Inventory management system transformation projects are phased 20. Specific features and functionality of inventory management systems [1] 21. Specific features and functionality of inventory management systems [2] Slide no. 22. Business environment 23. Inventory management systems vendor market shares [1] 24. Inventory management systems vendor market shares [2] 25. The inventory management system market will continue to grow as federation and transformation projects increase 26. As transformations increase, the inventory system market will shift its focus towards IP infrastructure, IT-like equipment, and services 27. We include outside plant systems as part of the engineering systems sub-segment of service fulfilment 28. The business environment in Regional outlook 30. Pricing models 31. System comparisons and historical pricing models 32. Ericsson is primarily a services and equipment company, but Granite Inventory is very configurable software 33. Ericsson also acquired the traditional RBOC inventory management and design systems from Telcordia these are still in use today

3 3 Contents Slide no. 34. Amdocs is a BSS powerhouse and gained a strong inventory management system offering when it acquired Cramer 35. NetCracker operates as a separate division of NEC and is involved in services work as well 36. Oracle has grown by acquisition and integration 37. Current pricing models in effect and potential changes 38. Methodology and pricing model considerations 39. Pricing models used by most vendors 40. Larger enterprise-level deals, and one of the major vendors structures its prices according to the number of items in the inventory 41. Another major vendor uses a very complex pricing model 42. New pricing models are beginning to emerge, driven by the move to flow-through provisioning 43. Vendor snapshot 44. Amdocs 45. Comarch Slide no. 46. Ericsson 47. NEC/NetCracker 48. Oracle 49. Visionael 50. Vendor analysis 51. Vendor analysis summary: geography and service [1] 52. Vendor analysis summary: geography and service [2] 53. Mergers and acquisitions 54. Mergers and acquisitions 55. About the authors and Analysys Mason 56. About the authors 57. About Analysys Mason 58. Research from Analysys Mason 59. Consulting from Analysys Mason

4 4 List of figures Figure 1: Inventory management systems features position on the innovation adoption curve, worldwide Figure 2: Telecoms software market segments Figure 3: Definitions of service fulfilment sub-segments Figure 4: Inventory management system key functions Figure 5: Traditional fixed service fulfilment information flow Figure 6: Modern service fulfilment information flow Figure 7: Typical phased IM system transformation process Figure 8: Inventory management market shares by revenue, worldwide, 2012 Figure 9: Inventory management system revenue, worldwide, Figure 10: Inventory management system revenue by region, worldwide, Figure 11: Inventory management system revenue by telecoms service, worldwide, Figure 12: Fixed network planning and optimisation software suppliers market share by revenue, worldwide, 2011 Figure 13: Oracle s BSS/OSS coverage overview Figure 14: Inventory management system pricing model, a major vendor Figure 15a b: Comparison of service fulfilment suppliers by region and service sector Figure 16: Key mergers and acquisitions in the service fulfilment market,

5 5 About this report Our last report that focused on inventory management (IM) systems was published nearly a decade ago. At that time, IM systems were just making their way into a market dominated by spreadsheets and home-grown relational database systems. Now, nearly all communications service providers (CSPs) have implemented IM systems from commercial vendors for their new services and many are undergoing transformation projects to consolidate the many legacy IM systems still in use. This report focuses on: the functionality of modern IM systems how IM systems fit into the overall BSS/OSS architecture how modern IM system transformation projects are implemented 23 vendors in the IM systems market, particularly the top-six in terms of revenue in 2012 Ericsson, NEC/NetCracker, Amdocs, Oracle, Visionael and Comarch the pricing models that leading vendors have adopted. This report is aimed at: newcomers to this area, who will find substantial tutorial information and a review of the major players in the IM systems market all CSPs (fixed and mobile) that are embarking on a transformation project to replace and consolidate their IM systems and seek to understand more about the advantages and disadvantages of the various strategies CSPs that wish to know the areas of proven and speculative innovations in modern IM systems and understand the best current practices software vendors that wish to benchmark their IM systems against an industry maturity curve.

6 Engineering systems Modern inventory management systems: market review and pricing models 18 Modern service fulfilment information flow Figure 6: Modern service fulfilment information flow [Source: Analysys Mason, 2014] CRM Order management Inventory Activation Network and element management systems (NMS/EMS) for technology A Customer care Customer order orchestration Catalogue Order management Inventory Activation NMS/EMS for technology B Subscriber management Activation Service delivery platforms (SDPs) Service fulfilment Partner CSPs, third-party vendors Modern service fulfilment architecture blurs the traditional OSS/BSS lines. Orders from CRM or subscriber management systems are passed to customer order orchestration systems that decompose complex, multi-product orders and orchestrate the overall order. Sub-orders are passed to multiple service fulfilment technology stacks for further decomposition, management, design and assign, and activation. Some sub-orders go to the systems of partner CSPs or third-party vendors. Activation systems directly interfaced with customer order orchestration (or OM) systems when a simple activation is required. The BSS and OSS components each need data about the products and services required in order to fulfil the orders. This data is stored in multiple product catalogues, federated or manually synchronised. Engineering systems have evolved into full systems, with databases integrated into inventory and other service fulfilment OSS systems and processes.

7 Manual operation Modern inventory management systems: market review and pricing models 19 Inventory management system transformation projects are phased Many CSPs are undertaking transformation projects for IM systems and for the entire service provisioning process. These transformation processes do not use the big bang approach from a decade ago. Instead, they use agile-like methodology and implement the transformation in approximately six phases, each lasting 3 6 months. The first phase typically focuses on a narrow range of technologies, services or customers. The later phases can be based on technologies, services or customers, or a mix of these three, with the largest populations done in later phases. These phased, agile, departmental-sized transformation processes are less risky than largescale transformation processes. All parties the CSP, the vendor and the SI (if involved) gain knowledge of how to do the necessary data cleansing, data movement and transformation, and process re-design, making each additional phase easier. Figure 7: Typical phased IM system transformation process [Source: Analysys Mason, 2014] Order management for A Inventory for A Activation for A NMS/EMS for technology A Phase 1 Customer care Legacy OM Inventory for B Activation for B NMS/EMS for technology B Activation for A NMS/EMS for technology A Phase 2 Customer care Order management for A and B Inventory for A and B Activation for B NMS/EMS for technology B In later phases, the scope of the IM system, and the provisioning process, grows to encompass other areas

8 55 Executive summary Recommendations Market definition Business environment Pricing models Vendor snapshot Vendor analysis Mergers and acquisitions About the authors and Analysys Mason

9 56 About the authors Mark H. Mortensen (Principal Analyst) is the lead analyst for Analysys Mason s Customer Care and Service Fulfilment research programmes, which are part of the Telecoms Software research stream. His interest areas include customer self-care, automation of fulfilment processes, and data and software architecture for agile, realtime systems. The first 20 years of Mark s career were spent at Bell Laboratories, where he distinguished himself by starting software products for new markets and network technologies, and designing the interaction of BSS/OSSs with the underlying network hardware. Mark was Chief Scientist of Management Systems at Bell Labs, and has also been president of his own OSS strategy consulting company, CMO at the inventory specialist Granite Systems, VP of Product Strategy at Telcordia Technologies, and SVP of Marketing at a network planning software vendor. Mark holds an MPhil and a PhD in physics from Yale University and has received two AT&T Architecture awards for innovative software solutions. He is also an adjunct professor at UMass Lowell in the Marshall School of Management, specialising in business strategy. John Abraham (Analyst) is a member of Analysys Mason s Telecoms Software research team and contributes to the Revenue Management, Service Fulfilment and Customer Care programmes. He has more than five years experience in the telecoms industry. He has worked for a global OSS vendor and implemented revenue management solutions for Tier 1 telcos in Europe, India and the Middle East. John joined Analysys Mason in early He holds a bachelors degree in computer science from Anna University (India) and an MBA from Bradford University School of Management (UK).

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