COMPANY PROFILE REPORT WEDO TECHNOLOGIES: REVENUE ASSURANCE AND FRAUD MANAGEMENT SOFTWARE BASED ON DATA FROM THE ANALYTICS SOFTWARE SOLUTIONS WORLDWIDE MARKET SHARE 2013 REPORT PUBLISHED IN 2014 JUSTIN VAN DER LANDE analysysmason.com
About this report This report has been commissioned by WeDo Technologies and uses data gathered by Analysys Mason for a syndicated report Analytics software solutions: worldwide market shares 2013 published in July 2014. The report studies vendors who use analytics software within CSPs to support multiple business cases, but specifically breaks out RA and FM as distinct sub-sectors within the market. The remaining general purpose analytics tools are covered within the business analytics sub-sector. Data was gathered from extensive primary research with vendors to create a deep understanding of their revenues. The full report provides details on the geographical and services to which the revenues were attributed. The report is available online for download from the Analysys Mason website. www.analysysmason.com/research/content/reports/analyticsmarket-share-jul2014-rma14/ Figure 1: RA and FM are a distinct sub-sector within Analytics software solutions: worldwide market shares 2013 report Definition Analytics Revenue assurance Fraud Management Business analytics The analytics software solutions market share report covers four technology areas of the RA/FM and business analytics sectors: extract load and transformation technologies for the loading of data, data schemas specific to the communications industry analytics and business intelligence (BI) tools that enable data mining, machine learning and the creation of analytics models data presentation for visualisation or export to other systems.
Company summary WeDo Technologies (WeDo) is a leading provider of revenue and business assurance software, managed services and consultancy. It is a private company founded in 2001 and headquartered in Lisbon, Portugal, with regional offices in 12 countries worldwide. WeDo provides software and related services to the telecoms, retail, energy and financial industries. It has more than 180 CSP customers in 90 countries. This profile focuses on WeDo s revenue management offerings for the telecoms industry. The company s main revenue management portfolio includes revenue assurance (RA), fraud management (FM), rating and billing validation, and traffic analytics. It also provides solutions for roaming management, customer value management, credit control and collections management, and mediation management. RAID is the company s flagship product for revenue assurance and fraud management. RAID use cases include platform integrity, usage control, reducing bad debt risk, partner settlement assurance and sales audit. WeDo enhanced its core solution portfolio with the complementary netclarus traffic analytics solution through its acquisition of Connectiv Solutions in 2012. Figure 1: WeDo Technologies company facts Founded Feb 7 th 2001 Offices Employees More than 500 Regional focus HQ in Lisbon, Portugal, Regional offices in Australia, Brazil, Egypt, France, Ireland, Malaysia, Mexico, Poland, Portugal, Spain, UK and USA Worldwide Revenue Overall - USD83 million (2013) Selected key customers Over 180 customers: in 90 Countries over 5 continents that include : Vodafone Group, T-Mobile, Etisalat Group, Orange Group, Ooredoo Group, Vimpelcom Group, Claro, Telenor, Oi 3
Revenue (USD million) WeDo Technologies profile report Company summary: financials WeDo s overall revenue was USD83 million in 2013, an increase of 9% from USD76 million in 2012. These figures comprise revenue from all the industries the company serves, including telecoms, retail, energy and finance. It has sustained solid growth and profitability in the mature revenue management market. It has increased its revenue more than two-fold since 2006 and has posted positive EBITDA for 12 consecutive years. WeDo derives most of its revenue from the telecoms industry, although it is increasing its market presence in other industries and achieving high growth rates. WeDo is owned by Portugal-based Sonae group, which has interests in retail, shopping centre and real estate as well as telecoms. WeDo won 20 new customers in 5 different countries during 2013. It has expanded its revenue management capabilities, industrial expertise and customer base through acquisitions of several companies worldwide since 2007. In 2012 it acquired Connectiv Solutions, a provider of network usage expenses management solutions in North America. Figure 2: WeDo Technologies revenue, worldwide,2013 90 80 70 60 50 40 30 20 10 0 64.0 76.0 Figure 3: WeDo Technologies revenue by region, worldwide, 2013 83.0 2011 2012 2013 20% 15% 10% Total revenue: USD 83 million 55% Source: Analysys Mason APAC EMEA LATAM NA Source: Analysys Mason 4
WeDo Technologies leads Analysys Mason s worldwide market share for revenue assurance and fraud management We estimate that revenue in Revenue Assurance sector grew at a 7% CAGR during 2013/14 The market share positions of the leading vendors changed during 2013 because: WeDo Technologies substantially increased its revenues through organic growth and acquisition. The weakened revenues of some key vendors has reduced market share resulting in a change in the leadership position of vendors. Vendors who have changed from traditional licencing models to business models where software is delivered as a service have seen a reduction in revenues. Vendors that have been able to maintain or grow their traditional licencing models have gain market share. The falling costs of storage and big data technologies is driving overall costs down. The sector has the good potential to grow, but CSPs are reluctant to increase their spending in the Revenue Assurance market without gaining increased functionality. Figure 3: Market share for Revenue Assurance and Fraud Management vendors 2013 Other 34% Competitor E 5% Competitor D 11% WeDo Technologies is the market leader for revenue assurance and fraud management products and services WeDo Technologies 14% Competitor C 11% Competitor A 13% Competitor B 12% Source: Analysys Mason 5
Analytics and Revenue Management business trends RA and FM continue to be highly significant to Telecoms. Falling services margins makes even small losses through revenue leakage highly relevant to CSPs. Revenue leakage is widely accepted to be 1.1% of revenue with over 50% of loss being attributed to RA. Continued changes to the network infrastructure and the increasing complexity of charging options that use policy-based charging techniques continue to create new challenges that require RA and FM tools to support CSPs. New service types such as mobile money and cloud services are creating new revenue leakage challenges. RA and FM tools are moving from batch mode transactions to support real-time monitoring that can predict potential issues before they occur through sophisticated modelling techniques. This underlying technical capability is changing revenue leakage tools that used to provide detection to be able to trigger corrective actions. The modelling of data also provides the ability to predict potential issues before they arise. Tools are increasingly needed to address the full scope of a service life-cycle. This means that each step of a service is checked for its integrity to ensure a robust process. Figure 4: Generic Revenue Assurance and Fraud management components Data warehouse Data source Dashboards Data Reconciliation Applications Core tools Case management ETL functions Data source Business process automation Data source Data Analysis Data source 6
Three Global IT trends impacting the revenue assurance and fraud management market Trend Impact The rise of big data technology Hadoop uptake in all IT applications is growing at over 50% CAGR for the next 3 years. Hadoop and similar technologies dramatically reduce the cost of loading, storing and analysis of large data sets. Vendors are able to provide faster analysis of data to provide more comprehensive monitoring and real-time analysis of data. The use of analytics New visualisation tools enable business users the ability to use analytics within their processes without highly skilled training. The increasing use of analytics capabilities within RA and FM tools enables deep analysis of complex large data sets. Vendors have encapsulated and refined multiple models into rich applications within the RA and FM tools to support customers requirements. The use of XaaS The use of as a service pricing models for applications is driving down the cost of ownership In order to reduce operational costs CSPs are electing to adopt the use of SaaS based RA and FM tools for some functions. This is especially true where CSPs are relatively small or are in locations where skilled staff are hard to recruit to support RA and FM functions. 7
Strategic direction WeDo Technologies is a specialist provider of revenue assurance and fraud management solutions that is aggressively expanding its product offerings through acquisitions and organic development of new business areas and into new vertical industries. It aims to continue increasing its market share in the revenue assurance and fraud management markets and grow additional revenues based on its SHAPE Telecom and other new product developments. The company continues to invest in the R&D of its flagship software product, RAID, with the most recent release termed RAID TELECOM. Figure 5: WeDo Technologies s revenue by sector, 2013 80% Total revenue: USD 83.0 million 20% Fixed line Mobile Source: Analysys Mason WeDo also provides its software solutions under a software-as-aservice (SaaS) model, enabling companies to deploy its solutions with lower total cost of ownership. WeDo delivers SaaS both as public cloud and private cloud (managed services). Its rating validation solution is delivered through Microsoft Azure. Figure 6: WeDo Technologies revenue by products and services, worldwide, 2013 30% The ability for CSPs to configure and maintain their own services also continues to help reduce costs of the implementations. Total revenue: USD 83.0 million Products Services 70% Source: Analysys Mason 8
9 WeDo Technologies telecoms software solutions overview Figure 7: WeDo Technologies telecoms software solutions overview [Source: Analysys Mason, WeDo Technologies, 2015] Enterprise Business Assurance (EBA) (revenue assurance, fraud management and other audit and control ) Analytics Business Management Data applications Platform Integrity Mediation systems Usage Control Prepaid Balance Validation Billing and Rating Validation Data acquisition and loading Sys Log data RAID Telecom Revenue Assurance Business Control Network data Partner Incentives Assurance Supplier Cost Assurance Customer Collections Assurance Financial data Fraud Management Churn Prediction models WeDo ETL Tools Interconn ect data Internal Churn models Shape Telecom Behavioural segmentation models Roaming data Value Segmentation models Cross-selll/ up-sell, NBO models Data warehouse Billing systems Customer Lifetime value models Roaming management Payment systems Broker Credit scoring and collections Incentives management Customer data Credit Control and collections management Professional and Managed Services
Key acquisitions and mergers Figure 8: WeDo Technologies key acquisitions and mergers Date Company Description 2012 Connectiv Solutions WeDo Technologies acquired Connectiv Solutions, a provider of network usage expenses management solutions in North America, in May 2012. Connectiv Solutions netclarus software solution provides access to all raw data records (xdrs) and enables CSPs to analyse these records to identify, monitor and reduce variable network operating expenses. WeDo offers the two modules of netclarus, netclarus TRAFFIC and netclarus INTERCONNECT, as a traffic analytics solution. This acquisition was part of the company s expansion strategy in North America (NA). WeDo gained an installed base of CSP customers, complementary products to its portfolio and marketing capabilities in NA as a result of this acquisition. 2011 K2C WeDo Technologies announced the acquisition of K2C in July 2011. It added K2C s mediation product to its portfolio and strengthened its know-how on complex events processing as a result of this acquisition. 2007 Cape Technologies WeDo Technologies acquired one of its main competitors in the revenue assurance area, Cape Technologies, in September 2007, for EUR17 million, with a possible further EUR3 million subject to the achievement of some targets. This acquisition was part of the company s international expansion strategy. 2007 Tecnológica WeDo Technologies announced its acquisition of Tecnológica, a Brazilian software development company in the revenue assurance area, in July 2007. WeDo gained a software factory with a strong R&D capacity, enhanced product knowledge and local product support to add to its existing structure in Portugal. The move also enabled WeDo to expand its client base in Brazil and Latin America and diversify its portfolio of products that complement RAID. 10
Significant customers Figure 9: Key customers Customer Country Scope Orange EMEA Orange has deployed WeDo s RAID solution in a number of Orange entities within the group. WeDo s RAID software has provided Orange with protection from revenue leakages, and fraud loss prevention. Turkcell Turkey Turkcell, the leading mobile operator in Turkey, implemented RAID across the entire Turkcell group. RAID will help Turkcell avoid data and financial losses related to inconsistencies in business support systems and network platforms. WeDo partnered with a strategic consultancy company called Telcotank and an integrator company called i2i to deliver the project. Verizon USA Verizon implemented WeDo s netclarus traffic analytics solution for auditing purposes. VimpelCom (Beeline) Russia VimpelCom (Beeline), one of the major mobile operators in Russia, implemented the RAID revenue assurance solution. WeDo worked with Accenture to deliver the software and meet the specific requirements of the CSP. Vodafone Czech Republic Vodafone deployed the rating validation module of WeDo Technologies business assurance software solution, RAID version 6.2, to ensure the accurate rating of prepaid call charges. In addition to the software, WeDo Technologies also provided integration and training services to the CSP. Zain Iraq, Jordan and Kuwait Zain Group selected WeDo Technologies RAID solution to analyse and identify risks, monitor controls, provide billing assurance and manage forensic investigation compliance. RAID will be deployed to minimise risk and prevent revenue leakages in the three countries where Zain operates. 11
Analysis: strengths, weaknesses, opportunities and threats STR ENGTHS WeDo continues to strengthen its portfolio of revenue assurance and fraud management products with business management solutions for roaming and collections. The company is currently looking for mergers and acquisitions in this area. New analytics applications within the SHAPE TELECOM product add further out-of the-box products for CSPs. The company has strong Tier-1 customer references and a significant market presence in EMEA. Its software solutions are supported by solid service offerings and it can deliver its solutions using a SaaS model if required worldwide. OPPOR TUNITIES It is increasing its sales and marketing capabilities in NA after an acquisition, and is capable of serving the increased need for revenue assurance solutions generated by LTE deployments and roaming. It is a well-positioned niche player in the revenue assurance and fraud management market, with few competing players. WeDo s analytics applications based approach into non-revenue assurance / fraud management parts of the analytics market enables it to compete with more general-purpose based tools that require greater professional services support. WEAKNESSES WeDo is not as well positioned within the high-growth emerging markets of Asia pacific, with a heavy reliance on a stagnated European market limiting the organic growth with current products and services. Where CSP s wish to use their own analytics tools and software the inability to easily use the models within other general purpose analytics tools may meet resistance from IT staff within CSPs THR EATS New, more aggressive pricing models from rivals will make winning business from them harder. ISVs providing general- purpose analytics tools that are also deployed for revenue and fraud management use cases can become significant threats where an enterprise-wide approach is adopted. Home-grown solutions based around Hadoop and off-the-shelf visualisation of data may become attractive if in-house skills increase. 12
About the authors Justin van der Lande (Principal Analyst) leads the CEM, Analytics Software Strategies and CSP IT Strategies research programmes, which are part of Analysys Mason s Telecoms Software research stream. He specialises in business intelligence and analytics tools, the functionality of which cuts across all of the research programmes in this area. He also provides project management for large-scale projects within our Telecoms Software research. Justin has more than 20 years experience in the communications industry in software development, marketing and research. He has held senior positions at NCR/AT&T, Micromuse (IBM), Granite Systems (Telcordia) and at the TM Forum. Justin holds a BSc in Management Science and Computer Studies from the University of Wales. 13
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