Estimating the size of the revenue assurance market is complicated by many factors. Some of these I write about on a regular basis: the lack of transparent accounts for privately-owned companies; the difficulty of estimating the extent of the market supplied by ‘in-house’ developers; and the different definitions of what to include and exclude. One factor I tend to overlook is the role of the big companies that dabble a toe in the waters of revenue assurance but for whom RA is only a trivial slice of their total revenues.
To give a few examples, there is Ericsson, which is as comfortable at offering their revenue assurance service line as they are at selling video calling solutions, and HP can supply RA software as well as printers. Nokia Siemens Networks seems to have a business pitch for revenue assurance rooted firmly in the past (claiming leakage rates of 5% to 15%? – most reputable vendors have given up on extreme scare story tactics) but aspires to build a strong SI capability with niche expertise. Meanwhile, I have previously been critical of how Nortel tries to make money from revenue assurance by essentially selling the secrets of how their equipment works. If you paid for the equipment, you should get the info on how it works, without needing to pay Nortel a second time and dressing that up as revenue assurance. One business that I always thought would only venture tentatively into revenue assurance is Israeli billing giant Amdocs. As revenue assurance is – rightly or wrongly – often taken to be the discipline that sorts out what is wrong with billing, Amdocs need to tread carefully in case they are accused of being like Nortel, and trying to double their profits by fixing flaws in the systems they sold in the first place. Nevertheless, I see Amdocs are recruiting an RA consultant in the US. When reading this news, thoughts turn to what must be going through the minds of RA specialists and fellow Israelis cVidya, who borrowed heavily in order to build up their presence in the US and whose backers have many links to Amdocs.
For the big fish companies like NSN and Amdocs, the people they offer as RA experts may only do RA as a part-time job. They may spend just as much time project managing the implementation of billing platforms or trying to streamline provisioning. That does not mean they are not RA experts – but they tend to favour a certain flavour of revenue assurance over all others. Whether expert or not, they reopen the question of what to include in an assessment of the size of revenue assurance, and highlight the difficulty in valuing a market where some numbers are never published and others are lost in the insufficient granularity of a big business’ annual reports.
The role of the big fish players in the marketplace is also hard to judge. They tend to be novelty plays, with a few customers here and there but no real pretension to build RA market share and happy to pocket some quick win profits wherever they can by making sales to customers too daft or lazy to research and identify alternative suppliers. But with their financial firepower and scale, they could be much more, and try to exert a more dominant influence, especially if they decided to takeover some of the niche vendors. There are doubtless some niche minnows who would only be too happy to be gobbled up by a big fish. That none of the big fish has swum down this route suggests that they simply do not think it good business; they do not want to take a risk on RA for the relative return they expect. Instead, the big fish prefer to skim some profits whilst minimizing their investment, by reselling the software of a white label supplier or hiring and firing consultants in response to guaranteed sales. That, in itself, tells us something about the size and profitability of the RA market, both today and tomorrow.