There was probably joy in finance-land when Ericsson made its move to acquire Telcordia. The company — formerly Bell Communications Research or Bellcore — was at the same time the “labs” of the RBOCs and the foundation for the support of and evolution of the classic vision of OSS/BSS. For years it has struggled with its conservative roots in a market where classic visions were increasingly irrelevant. It was picked up by a private equity player that clearly saw OSS/BSS as more exciting than most of us do. These guys are probably burning incense right now to acknowledge what could well be divine intervention in getting them out of Telcordia alive. They should be.
So does this mean Ericsson was dumb, and that this acquisition is simply a step on the slide of OSS/BSS into strategic irrelevancy? The answer to both questions is “Maybe, but then again, maybe not!” It’s true that there is little in all of networking as boring as an OSS/BSS. It’s true that OSS/BSS gives glaciers a run for their money in terms of inertia. It’s true that the OSS/BSS beat is where reporters go if they don’t believe in hell.
But it is also true that OSS/BSS is the business heart of service providers worldwide.
Ericsson more than any other “network vendor” doesn’t want to be a network vendor. It wants to be a professional services company. The task of upgrading back office telecom processes is certainly a major professional services opportunity, and Telcordia is certainly a repository of expertise in that area with a built-in fan base among the OSS/BSS types at least.
Furthermore, it’s a lot easier to spin a profitable professional services deal for OSS/BSS migration if you have the software components of the new systems. Any product is good because it can be sold multiple times; services are always one-offs. By blending the two, Ericsson can make good deals on OSS/BSS migration for the customer and still have a lot to carry to the bank.
So if this is a good deal, how will it impact the market dynamic? Well, you can divide the Ericsson competitors into two classes, those who can only spell “OSS/BSS” and those who actually have a practice in that area. In the former category you have Cisco and Juniper, and in the latter you have Alcatel-Lucent and NSN. The move impacts these groups differently.
For Alcatel-Lucent and NSN, this spells very significant competition in back-office integration services. Alcatel-Lucent, which has been more services-oriented in this space all along, may now find itself looking for some M&As in the OSS/BSS space, and right now it really doesn’t need the distraction of absorbing something. NSN has decent OSS/BSS elements and credentials, so it’s risk is competition—not so much from Ericsson (which may be the only company in the space that NSN can stand against in marketing excitement) but because the new market dynamic may require positioning and excitement, something NSN has had problems with from the first. And of course with rumors that Nokia wants to sell off its NSN stake, this isn’t a good time for singing.
For Cisco and Juniper the problem is that neither company wants to think about OSS/BSS at all. Cisco has always considered it a bastion of the Evil Empire of Telephony, an interesting factoid given that Cisco more than any other company might have been the genesis of the TMF, the Church of OSS/BSS. Juniper flirted with the evolution of management in its sponsorship of the IPsphere Forum, and that was finally absorbed into the TMF, but Juniper has been steadily disengaging from that activity and has no relevant position in the space at all. Both companies could now find that occasionally blowing kisses in the OSS/BSS direction won’t keep operators happy.