When Watchmark-Comnitel acquired the Metrica Software Systems business from ADC it brought together the two leading players in performance management and service quality management. Mark Greatrex, general manager of the combined performance management division, tells Keith Dyer how the merger will answer the changing business needs of its mobile operator customers.
Mobile Europe: Metrica Software Systems has been bought from ADC by Watchmark-Comnitel. Can you tell us how the new business will now be structured?
Mark Greatrex: The way the company is now organised is into two divisions — the performance management division and the service quality management division. I am the general manager of the performance management business division. The service quality management business is run by Kieran Moynihan, based out of Cork.
ME: So what products and services constitute the two divisions?
MG: For performance management, there is Performance Manager, which is Metrica’s flagship product, and NPR, which is Metrica’s most successful product over the last ten years. And then on the Watchmark side there’s Prospect, which is the market-leading product in the USA. And then on the top of all of that there is an enterprise-wide reporting system that pulls together all of the management and executive information. That’s come from the Watchmark side of the business as well.
As we are today, the performance management division will provide the majority of the combined revenues within the business. Obviously we see the service quality management business as a real growth opportunity, and ServiceAssure has become an early market leader.
ME: Will the market see the new company operate as two separate entities?
MG: No. Those two divisions are working very closely together to make sure that there is a single face to our customers and a single product strategy.
There will be a combined sales and marketing team that will go out and sell both product ranges. On the professional services side there is a single set of project teams and a single set of support for a combined product range. We wanted to get a real business focus on the product suites but from a customer perspective we want them to have a single face to deal with. So we have a single sales person they see, a single technical person that they see regularly and so on. So we have thought carefully about how we organise it best from an internal and customer perspective.
ME: Does that mean there will be some rationalisation to achieve that?
MG: When two businesses come together there will be some rationalisation over time. But, there will be considerable investment as well and that investment will outweigh the rationalisation. We will put money into those areas where we need to grow and develop but of course in some functions there will be some overlap.
ME: What are the prime benefits of the acquisition — both from your own and your customers’ perspectives?
MG: From a sales and marketing perspective one of the benefits is that we are very geographically complementary — so we can hit the ground running with a global sales team. Watchmark-Comnitel is very much the market leader in North America, with Metrica as number two. In Asia Pacific and Europe that is flipped the other way round with Metrica as number one. Then if you look at the service management space you’ve got Comnitel right up there as a market leader. So for all the markets we play in we are either number one or number two.
What is more challenging is the fact that, ultimately, both companies designed and developed a similar product range. The strategy there is about taking the best from each set of products and converging them on a single product line. So we will have a performance management solution that takes the best of Prospect, Performance Manager and NPR. Likewise, on the service management side we will merge the products from both companies and take the best of both. We are very keen to be sure that our customers get a return on their investment on their existing products and to provide them a seamless migration path. There will absolutely not be any end life or obsoletion of any of the products.
The real goal is to provide continuity for our customers — so integration of the product ranges is key. That’s already started, even before the dust has settled.
ME: It sounds difficult to achieve.
MG: Certainly it is non-trivial and an area that we’ve got to invest in, but there is a lot of architectural synergy and the feature sets are complementary in many areas. There has been significant investment in leading-edge platform technology in both companies over the last few years, which means we have a great base to build on going forward.
A prime benefit is that as the integration moves forward we are going to have the ability to invest more in what our customers need rather than investing in two separate product lines. As an example, we’ve got a huge library of network gateways and technology solutions between the two companies. So the first thing will be to make sure that we re-use the capabilities we already have. It’s not as if we’ll be waiting a number of years to launch new product — it will be done incrementally.
ME: Are there any benefits for the market in general from the merger?
MG: From a customer’s point of view, historically you had Watchmark and Metrica going head to head just about everywhere. That’s not healthy because you just constantly hit each other hard, and from a customer
perspective it can be quite confusing as to which product to go for. So it makes quite a lot of sense for the companies to come together and go for combined solutions to customers.
That said, we don’t want to be in a market where there’s no competition and there’s still certainly nothing like a monopoly. The customers need to know there will still be that competitive pressure, but on the other hand because of our combined resources we believe we will be able to offer a fundamentally better solution and level of service.
ME: Talking of that customer base, can you give us an idea of the scope of the combined organisation?
MG: In the United States we have got six out of the top seven wireless service providers. In Europe we’ve got Orange UK, KPN Group, T-Mobile and presence in a number of Vodafone affiliates globally. There are many more in Asia Pacific — including being the only software provider in our space to have made inroads in China.
On the OEM side we’ve got relationships with Lucent, Alcatel, Ericsson, Motorola and Nortel.
ME: Is the merger evidence of the increasing trend towards consolidation in OSS suppliers, and of increasing integration between different areas of OSS activity?
MG: The trend is definitely towards consolidation. The marketplace has started to mature. In an immature market place there are lots of point solutions but now the customers and suppliers have started to understand that these things can fit together. And we definitely see ourselves as a consolidator in that market place, broadening our product footprint.
There’s so much more value to the customer if this all pulls together and integrates. Their businesses have been siloed, and the target audience for these solutions from our perspective has been very much the technical guys in network operations and network planning. But that is changing. Service providers want a solution up to the CEO, out into customer service, into marketing. They want to know from a customer perspective what level of service they are providing and how they are doing. So the demand for an end-to-end solution has been driven by the customers and that’s healthy for everybody.
We are starting to see terms like “service assurance backbones” come from our customers and that’s exactly what it’s all about. For the last two or three years we’ve been trying to push this story and the customers just haven’t been ready for it yet. Now it’s turned around and service providers are out there looking for a top down end-to-end solution from a business point of view. They are getting excited about it and a lot of the Tier Ones are putting together working parties and best practice groups that are looking at this particular topic across the whole of their business.
ME: What do you think has effected that change of attitude?
MG: It’s very much driven by their customers — it is a competitive market place and they have got to be on top of the level of service they provide. That’s rippled through the organisation to place pressure on the network operations people to optimise the network and provide the information. The gap therefore is how do they measure the actual services that they are providing? And there has been a recognition that there is a gap in the solutions and the knowledge they have today to provide those services. They have been very good at optimising and managing the network but how do we take that up to the individual service level, how do we measure and track that? That’s been a big driver.
There’s also the move to 3G and GPRS and you need to solve these issues in a different way in these environments than from pure voice. You’ve got this issue of an extended content value chain — and that’s two way. If the content experience isn’t good people don’t blame the content provider, they blame the service provider. On the other hand if I’m a content provider paying to get my content delivered I better make sure it is or I’m not paying the bills.
ME: So it’s about how service providers can protect their reputation and service quality in a multi-service environment?
MG: Every time there is a new content or service launched, there is a huge opportunity for the service providers but it is also a threat to them because if that service doesn’t perform well then not only will they lose the customers to that service they will lose them across all of their services.
We have seen services launched successfully but also we have seen services launched where they have just not worked, and then you get the middle ground where the service sort of works but they can’t measure it and therefore they are quite exposed as a business.
And that’s the knowledge gap. They don’t know how to measure the service. So there’s the physical network and then there’s this cloud that sits in the middle, and they say, “Help us here. How are we going to measure this service?” We see an increasing role for us to add business value for people who can go in there and define how they should measure the service and then show them how the software can do it. And that’s definitely a shift in this market place.
ME: So how can you structure a product to meet this need to integrate service information, and present it to different business areas?
MG: Our products have been built in a modular fashion — we have designed them with openness in mind. The fundamental thing is you need to provide a platform that, first of all, can support multiple applications. But, you also need to make sure that you can provide light interfaces for system integration as well as closely coupled interfaces so that you can build applications directly on the platform as well. We’ve always kept the focus on making sure those interfaces are there and you can integrate, because without that the reality is customers aren’t going to get full business benefit.
ME: So there is untapped potential within service providers to extract business efficiencies from service assurance?
MG: Service assurance is at the core of a huge amount of business information. You’ve got to make sure that timely information can flow to every part of the organisation in a form that makes sense to each user community.
Ubiquisys says the capital will be used to accelerate the company’s programme to meet ‘significant demand’ for its femtocell technology, including new market segments such as indoor hot-spots, metro and rural deployments. The strategic investors bring significant expertise which will support the next generation of Ubiquisys products and its expansion into new markets.
In the past twelve months Ubiquisys says it has met a number of strategic milestones, including:
– SFR in France and SoftBank in Japan have successfully launched with Ubiquisys femtocells, driving strong revenue growth.
– SoftBank is offering its femtocells for free, driving massive consumer demand.
– Exploiting its extensive IPR to develop the full range of small cells: residential, enterprise, rural and metro.
– Its Femto-Engine software system has enabled the only femtocell with a wholesale price below $100.
“Ubiquisys is in a great position right now as we believe that the dynamic growth of the global Femto market is just starting-up. Ubiquisys has a sustainable technology advantage, its products have been tested and launched by multiple operators across the world, and it has started to deliver serious volumes,” said Michael Bornhäusser, Founder and Managing Partner of 5CCG. “I’m very excited to be getting involved in further accelerating the company’s growth and supporting the company on the board of directors.”
“The femtocell market is ramping faster than we envisaged, and the advent of the free model, pioneered by SoftBank and enabled by Ubiquisys, will only increase that momentum,” said Chris Gilbert, CEO Ubiquisys. “We are delighted to add the high-calibre support of 5CCG and Yasuda to our strong investor base as we embark on the next phase of our growth strategy.”