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© Analysys Mason Limited 2014

Modern inventory management systems: market review and pricing models

Research Report

Modern inventory management systems:

pricing models and market review

January 2014

Mark H. Mortensen and John Abraham


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Contents

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]

2

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 2012 2013

29. 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

Slide no. Slide no.


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Contents

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 structuresits 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

- provisioning

43. Vendor snapshot

44. Amdocs

45. Comarch

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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

Slide no. Slide no.


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List of figures

Figure 1: Inventory

innovation adoption curve, worldwideFigure 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, 2012 2017

4

Figure 10: Inventory management system revenue by region, worldwide,

2012 2017Figure 11: Inventory management system revenue by telecoms service,

worldwide, 2012 2017

Figure 12: Fixed network planning and optimisation software

market share by revenue, worldwide, 2011

Figure 13: 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,

2004 2011


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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 allcommunications 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.

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Modern service fulfilment information flow

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, withdatabases integrated into inventory and other service

fulfilment OSS systems and processes.

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Figure 6: Modern service fulfilment information flow [Source: Analysys

Mason, 2014]

Customer order orchestration

Activation

Order management Activation

NMS/EMS fortechnology B

Servicedelivery

platforms(SDPs)

Network andelement

managementsystems

(NMS/EMS) fortechnology A

Activation

Order management

Inventory Inventory

CRMSubscriber

management

Partner CSPs,third-partyvendors

Customer care

Servicefulfilment

E n

g i n e e r i n g s y s t e m s

Catalogue




NMS/EMS

for technology A

Order managementfor A and B

Inventory for A and B

Inventory management system transformation projects are phased

Many CSPs are undertaking transformation projects

for IM systems and for the entire service provisioningprocess.

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 large-

scale 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.

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Figure 7: Typical phased IM system transformation process [Source: Analysys

Mason, 2014]

Inventory

for B

NMS/EMS

for technology A

Activation for A

Order managementfor A

Inventory for A

NMS/EMS

for technology B

Customer care

LegacyOM

Phase 1

Customer care

Phase 2

Activation for A 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

Activation

for B M a n u a l o p e

r a t i o n


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Modern inventory management systems: market review and pricing models 55

Executive summary

Recommendations

Market definition

Business environment

Pricing models

Vendor snapshot

Vendor analysis

Mergers and acquisitions

About the authors and Analysys Mason


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About the authors

Mark H. Mortensen Customer Care and ServiceFulfilment 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, real-

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 the Revenue Management , Service Fulfilment and Customer Care 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

2012. He holds a bachelors degree in computer science from Anna University (India) and an MBA from Bradford

University School of Management (UK).

56


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About Analysys Mason

nd the

complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialistknowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.

57

Consulting

Our focus is exclusively on TMT.

We support multi-billion dollar investments, advise clients on

regulatory matters, provide spectrum valuation and auction support,

and advise on operational performance, business planning and strategy.

We have developed rigorous methodologies that deliver tangibleresults for clients around the world.

For more information, please visit www.analysysmason.com/consulting .

Research

We analyse, track and forecast the different services accessed by

consumers and enterprises, as well as the software, infrastructure

and technology delivering those services.

Research clients benefit from regular and timely intelligence inaddition to direct access to our team of expert analysts.

Our dedicated Custom Research team undertakes specialised and

bespoke projects for clients.

For more information, please visit www.analysysmason.com/research .


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Research from Analysys Mason

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors,

through a range of research programmes that focus on different services and regions of the world.

58

Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research

projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and

services with customised industry intelligence and insights.

To find out more, please visit www.analysysmason.com/research.


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Consulting from Analysys Mason

For more than 25 years, our consultants have

been bringing the benefits of applied intelligence

to enable clients around the world to make

the most of their opportunities.

59

Our clients in the telecoms, media and technology (TMT)

sectors operate in dynamic markets where change is

constant. We help shape their understanding of the future

so they can thrive in these demanding conditions. To do

that, we have developed rigorous methodologies that

deliver real results for clients around the world.

Our focus is exclusively on TMT. We advise clients on

regulatory matters, help shape spectrum policy and develop

spectrum strategy, support multi-billion dollar investments,

advise on operational performance and develop new

business strategies. Such projects result in a depth of

knowledge and a range of expertise that sets us apart.

We help clients solve their most pressing problems,

enabling them to go farther, faster and achieve their

commercial objectives.

To find out more, please visit

www.analysysmason.com/consulting .


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analysys mason modern inventory systems jan2014 samples toc rma02-1

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