Connectiva Grows in 2009; Industry Challenges for 2010

It looks to have been a good year for revenue assurance software suppliers Connectiva. The news is that they have opened a new office for their headquarters in New York, expanded their operational base in Kolkata, and taken on two new senior executives. You can read the story here. The firm, which obtained USD17m in additional VC finance late in 2008, has increased its headcount by 100% over the course of 2009.

2009 was heralded as the ‘year of revenue assurance’ by some – especially those with an interest in talking up the market. In reality, we have seen some RA vendors cutting costs whilst struggling to sustain their order books, whilst firms like Connectiva appear to have got stronger. Unlike some other vendors, we do not see public data on Connectiva’s revenues and profits, so comparison is difficult. However, a pattern has emerged. The RA vendors which tend to have done best have most of their staff based in countries where access to an educated and skilled workforce is cheap and plentiful. Rivals with staff in more expensive nations have found it harder to compete in a price-sensitive market. This pattern applies across the global telecoms industry and is not unique to RA. For example, Israeli BSS giant Amdocs has been cutting staff in its home nation and hiring in India and China. Earlier this month Amdocs announced plans to build a new R&D and operations centre in Tianjin whilst their CEO said jobs that had been moved overseas would not return.

The question for RA vendors in 2010 is whether their strategy will be to shift their workforce to low-cost regions in order to sustain margins, or whether some will break the mould and start to offer truly differentiated products which can command a premium price. If a business can do both, it will be in the strongest position of all.

Eric Priezkalns
Eric Priezkalns
Eric is a recognized expert on communications risk and assurance. He was Director of Risk Management for Qatar Telecom and has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and others.

Eric was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He was a member of Qatar's National Committee for Internet Safety and the first leader of the TM Forum's Enterprise Risk Management team. Eric currently sits on the committee of the Risk & Assurance Group. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

Commsrisk is edited by Eric. Look here for more about Eric's history as editor.