Basset Acquired for $10mn

Basset, the Swedish revenue management software firm, has been purchased by Enghouse Systems for USD10mn. You can see the press release here.

Though their strengths lay in managing wholesale and roaming revenues, Basset has long been a minor player in the business assurance market. Formerly called Bassetlabs, they have offered FMS and RA tools for over 10 years – but with little sales success. Rival software developers invested more heavily in their assurance products, and soon eclipsed Basset in terms of market share, riding a wave of growth that eluded Basset. Nevertheless, Basset continued to pitch themselves to the revenue assurance and fraud management community, though their misreading of the market was exemplified when they became the leading vendor sponsor of GRAPA. Basset’s current product portfolio makes little mention of assurance; we shall have to see if their new owners decide to exit the market.

Enghouse Systems is a publicly-traded Canadian software conglomerate, whose strategy appears to be based around acquiring underperforming enterprise software firms. Basset is just one of three firms they have already bought this year. Enghouse is growing rapidly, and are on course to earn over USD200mn in revenues by year end. Purchasing Basset should help Enghouse to increase sales in Europe.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

2 Comments on "Basset Acquired for $10mn"

  1. Eric,

    I think Basset should not be measured by the yardstick of sales alone. Their mission in RA/fraud is a bit different from most other vendor players.

    For instance, many of their clients are in emerging countries such as Africa where using the assurance tools of advanced countries makes less much sense or are too expensive. And it was probably a natural fit for Basset to align with GRAPA because many GRAPA training events are held in emerging countries.

    Basset stresses direct engagement with the operator and understanding the unique RA/FM needs in each market. This approach seems to fit very well with the philosophy of balancing the role of human experts with software.

    I recently conducted an interview with Basset and am preparing a story for Black Swan. There’s some fine talent and capability at the company and Enghouse no doubt recognized this.

    • @ Dan, I can only take vendors as I find them. Some years ago, I found myself on the receiving end of a sales pitch from Basset. They were trying to sell their RA software to our international telecoms group. In doing so, they didn’t differentiate themselves from other vendors. They didn’t hint they were cheaper. They didn’t admit their tools were simpler. They didn’t ask us about our particular needs. They said they had a deep understanding of best practices in assurance (possibly courtesy of GRAPA) but they clearly had no idea who I was, nor who my very experienced colleagues were, and they failed to appreciate that our collective experience of telecoms assurance was significantly greater than theirs. Why didn’t they check our profiles using LinkedIn? Why didn’t they conduct even a simple review of our telecoms group, and where it was operating, in order to tailor the presentation to our specific needs? I have no idea why they did so little prep, after chasing for the sales meeting in the first place. However, they did go through a tediously long list of all the countries where they had RA and FMS customers. To which I responded…

      “So, all your customers are operating companies in the Millicom Group, are they?”
      “The Millicom Group is a customer.”
      “And do you have any customers for your revenue assurance or fraud products from outside that group?”

      I think everyone knew the sales pitch was over at that moment. The moral of the story is not that Basset had no chance in that sales meeting – good managers have no need to waste time in meetings with vendors, if there is no possibility of buying their products – but that Basset blew their chance by behaving in a way inconsistent with how you now describe them. In other words, if they had presented a pitch where they said they had something cheaper, and more flexible, and well-suited to assuring retail wireless services in relatively small countries, that would have been very interesting to listen to, and they might have had a chance of making a sale. If they had admitted they were small fry in this market, and were looking for a win-win by persuading a second big international group to take a chance on them, and to influence the direction of their product roadmap, that would also have been interesting. But instead they acted like they were the experts, lowering themselves to educate yet another dumb-ass customer who cannot tell the difference between a global professional association and the kind of waffle that somebody might stick on the internet for free.

      As far as Basset were selling functionality comparable to the products offered by competitors, they were selling vapourware. If they were intending to sell something much more limited in scope – and hence respect the customer’s intelligence, because clever customers will work out if a product has limitations – they failed to say so. Maybe things have changed since, and perhaps they have more customers for their assurance products than before. But in summary, my personal experience of Basset suggested they would struggle to sell their assurance products outside of Millicom, which is a very particular group with unusually narrow requirements. And as far as I can tell, my observation has proven reliable.

      But the real bottom line is that research cuts both ways. There was a time when assurance was new for everybody. It was new for vendors, as well as telcos. If you are responsible for purchasing decisions in a large telecoms group, should you select the firm which has 20 developers in Sweden, has a very varied portfolio of non-assurance products, and only one major customer? Or should you side with, for example, a firm which has well over 100 developers in Bangalore, and is tightly focussed on developing assurance products, and already has a very wide range of customers for those products? In short, the difference between me and the salesmen from Basset is that I do research before important meetings, as well as during them.

      As you know, my love of research led me to start this website! There’s an old saying: “you’ve got to give a little, to get a little”. Occasionally I give some small bits of knowledge away… but I receive a lot in exchange. In contrast, Basset approached their sales meeting with us as if unaware of the existence of the internet. Hence they behaved like they were telling us ‘secrets’ about how to do revenue assurance that we didn’t already know!

      Dan, you’re very good at turning weaknesses into opportunities, and I like how you did that in your response, on behalf of Basset. You also do your research – which is why you found me and this website. But Basset didn’t act like that with me. As such, they failed to mitigate their weaknesses as a potential supplier, failed to identify any unique positive opportunities, and failed to offer anything beyond the same stock sales pitch that every vendor promised – irrespective of whether they could deliver the goods. This kind of behaviour invites cynicism. I genuinely hope Basset have changed in the meantime, and I look forward to seeing the evidence! Perhaps they can start by admitting GRAPA was a bunch of malarkey, and that they now regret getting involved with that conman because it damaged their reputation? ;)

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