Mark Nicholson is Chief Technology Officer of Subex and it was my pleasure to spend some time talking with him for this month’s podcast. In recent years, Subex has grown rapidly from its Indian base to establish itself as a worldwide force. Starting out with a focus on the fraud management niche, Subex has greatly extended its product portfolio. Based in their Canadian office, Mark joined Subex followed its integration of Syndesis, the fulfillment and assurance business. At Subex, Mark is responsible for the company’s long-term technology strategy and for driving the definition, direction and development of the Subex software suite, which covers both revenue maximization and FAS. For talkRA podcast 4, we talked about Subex’s technology strategy, and how that fitted within a wider context of Subex’s market position and industry trends. Look below for a brief summary transcript, but to get the full 45-minute interview, you will need to listen to the podcast!
As well as making them one of the biggest players in revenue assurance, several years of growth and acquisition activity looked set to turn Subex into an irrepressible force in OSS and BSS. After a long and impressive run of good results, Subex took a knock in its last financial year, not just falling short of guidance but also returning a loss. In the Q3 figures recently announced by Subex, there were signs that their business may have turned a corner. In Q3, revenues were up, costs were down, and profits before exceptionals were better. I started by asking Mark how Subex’s management team regarded the Q3 numbers.
Eric: Mark, you’re the Chief Technology Officer for Subex – you’re not the CFO – but the Q3 results came out recently. Do you want to comment on how happy Subex’s management team is with the results?
Mark: We are happy. We’re going in the right direction. We took action early and that action is paying off. We’re executing, we’re a global company, we’re diverse, in summary, we’re happy.
Eric: Subex is a big business, that goes beyond revenue maximization and includes fulfillment and assurance. Can you summarize, from a technological perspective, the synergies between revenue maximization software, and your fulfillment and assurance products?
Mark: There’s marketing and the value proposition as well, but from a technology perspective, there’s a lot of synergies in the approach we take to developing the software – middleware, workflow, focus on the user (rather than the technology), data warehousing, collection of data, interfacing to the network – there’s a lot of synergies between the two portfolios.
Eric: You touched upon the wider business synergies.
Mark: Yeah, that’s more significant. Coming from a technology background – I have been in BSS but for the last ten years I’ve been very close to the network – if you look at a lot of the OSS products and how they are positioned, a lot of the OSS vendors (including the former Syndesis) had a technology-focused approach to product build, what’s the value proposition etc. What I’m finding is that, in terms of the product lifecycle management, I’m finding OSS can learn a lot from BSS, especially from revenue maximization [which is] very productized. I’m finding that, on the OSS side, we can borrow a lot of the focused intimacy with the end user, the intimacy with the financial buyer, the way it is presented. That’s what we’ve been doing, bringing that into the OSS side.
Eric: You could argue that if services are fulfilled quickly, without any errors, that reduces your potential for revenue leaks, or for money to be wasted on inventory that is not used. Does that mean your two product sets are slightly conflicting? As you sell the original Syndesis line, you limit the business case for revenue maximization products?
Mark: Ultimately any RA or revenue maximization vendor has got to be thinking of putting themselves out of a job. If you look at the entire stack, end-to-end, in a large carrier, we talking hundreds of systems, and people – manual operations – it’s going to take a long time to get to the ideal state of operational affairs. If we were very successful, not just in [Subex’s] part, but in the [service provider’s] entire fulfillment stack, we’d make a huge dent in the revenue leakage.
Eric: You could almost say that Subex is in a unique position in the market. A lot of people say that revenue assurance is about putting itself out of business, but there aren’t going to be many CEOs who are really going to go to their shareholders and say “we want to put ourselves out of business”…
Eric: … whereas Subex could sell a lot of revenue maximization products, generate a business case for improving the fulfillment stack, and you’d be able to sell and make the win there. So if there’s a shift towards [operational] ‘nirvana’ you could be part of that process.
Mark: That is correct. Going back to your very first point, this used to be the dilemma of the billing companies – ‘why are you selling me RA products when you should fix your billing system’? The problem with that statement is that it’s extremely unlikely that one vendor’s product is the entire chain – so RA and revenue maximization is covering a much larger chain.
Eric: Where the market is going: you talked about OA – Operational Assurance – do you want to tell me a little bit more about what you think Operational Assurance is?
Mark: There’s three parts. There’s Operational Assurance, the Revenue Operations Centre and then there’s Business Optimization. OA is the concept of RA, but applied to more than the revenue chain. All of the concepts in RA apply just as well to fulfillment. We’re going all the way from subscription assurance, service assurance, representation of the customer and their products in the various billing systems, representation in the customer care system, flow of events as they come in (however they come in)… OA is a wider step looking at the three main stacks: the fulfillment stack, the assure stack, and the billing stack. The fourth stack, which will come later, is the plan and build stack. Right now the focus is the FAB stack. From Operational Assurance, it’s very similar to Network Assurance. You’re looking at this entire complex network. You have hundreds if not thousands of systems that should be working together… you’re looking at the integrity, not just from a revenue point of view, but from an expected result point of view. This is represented in the ROC, just as the NOC would be a similar analogy for the network. That’s a lot of very accurate operational data. So now we can start to do things like analytics – like how do I optimize? We can prioritize, leading into Business Optimization. So this would be a sequence of OA, into the ROC, and then into end-to-end Business Optimization. This hopefully is taking an approach where the operational folks, at the front line, can suggest and make business improvements based on that data. That’s how we see RA expanding into OA, which we’re doing already, expanding into the ROC, which we’re doing already, and now we’re looking at expanding, with partners, into BO.
Eric: RA then becomes one facet of a much more integrated way of using data to achieve many objectives in the business. You build a capability to understand your business, obtain that data very quickly and in an intelligent way and use that for many potential customers within the business, some of whom might be interested in revenue, many of whom are interested in quite different things. That sounds like your vision of where revenue assurance is going – merged into something much bigger.
Mark: For example, we’re doing a project with triple-play TV, voice and internet. All three have their own billing system. Each billing system is a massive system, each with their own problems. As far as the users are concerned they get one bill, so the challenge now is to ensure that each of those systems is synchronized for every subscriber. What that means is that you’re pulling more complex data – you’re pulling product structures, you’re looking at hierarchical data – the technology is advancing in such a way that it can handle these more complex relations, these more complex structures. On the fulfillment side that’s technology that we have. On the fulfillment side there’s a lot of complex structures so this is where we’re finding synergies with the evolution of RA.
Eric: How would you characterize the distinction between Subex’s technology strategy and that of its competitors?
Mark: Technology is great, but true vendor differentiation is not by the technology…
Eric: … I don’t mean to give you a hard time, it’s just that you’re the CTO (laughs)…
Mark: I have a passion about technology as well, but from a product management perspective, it’s not just about technology. We have great technology. I believe we have some of the best technology out there. One reason is because of the cross-focus, and you start to see synergies because you’re looking across many product areas. It’s wonderful to be in a room where you’ve got a traditional RMS guy and a traditional FAS guy. After a while you see the synergy – that’s what I love to see coming out. For that reason, I believe we have a lot of technology that’s excellent for the kind of problems we’re trying to solve. But, as I said, I don’t think vendors differentiate based on technology. Where we differentiate is our engagement model, how we engage with our customers. What I like about Subex is what I call a customer-intimate model, as opposed to a customer-agnostic model.
Eric: I’ve got a question about a product you’ve recently released, TrueSource for Mobile, which enables the service provider to discover their network inventory automatically and then reconcile it to their OSS/BSS. Times are hard, there may be restrictions on capex. What would you say if a customer said: “we like the idea, we just don’t want to do this on a continuous basis, is there a way that you provide this as a service, or do it on periodic level?” How does Subex view those differing kinds of customer relationship?
Mark: We do that. It’s a great example of differentiating by your engagement model, your approach to the customer.
Eric: Maybe they don’t think there’s much wrong…
Mark: We’d go in there with a service approach. We’d discover, produce the discrepancy reports, help them prioritize correction and that’s the end of the engagement. We also have scenarios where we run it as hosted model. You do a dump from your network devices, transfer the data to our hosting centre, we run all the processing there, and then produce reports, so we don’t even have to be on your site. We have those various options.
Eric: I’m going to ask you a slightly cheeky question about TrueSource for Mobile. It’s been positioned in your marketing as being a fulfillment and assurance offering. Isn’t it just as much a revenue maximization offering?
Mark: You’re right. Depending on how the product is being used, what it is discovering and reconciling… when it comes to the subscriber side, it is more for the RA buyer. TrueSource fits in both the FAS side and the revenue maximization side.
Eric: One last question, a real leftfield one. Energy, politically important; you’re in Canada, Canada’s wanting to move away from coal power. Can you see a connection where someone with the understanding of complicated businesses from the background that you’ve had, transfers those skills into the energy sectors, and uses them to solve the problems of countries like Canada in terms of being more efficient with the use of energy?
Mark: This is pure CTO-speaking here, from a research perspective. First part: cheap sensors you can put on your power meters. Second part: ubiquitous and cheap wireless connection for the collection of that data, and then the third part, which is similar to OA, is looking at the process, the ins and outs. One happens to be power, another happens to be bytes, or bits. It’s something we looked at about seven years ago, but at the time the technology wasn’t ready yet. Communication was still too expensive. Sensors were (a) expensive and (b) not robust. But now, we’re very close. Yes, the approach we take in telecoms is now happening in other industries. It’s very interesting looking at the new President in the US, and his infrastructure projects. He says “infrastructure” and people think new roads and new bridges – but we’re talking smart roads, we’re talking about sensors embedded in the roads. Once you start to upgrade your infrastructure, you can start to apply a lot of the concepts in telecoms. We have built, in telecoms, the most sophisticated machine on the planet – which is the PSTN – and it works. It’s 99.999% available. Nothing’s as reliable as that. We can take a lot of those techniques and disciplines and apply them to energy, and I think the timing is getting such that a lot of things are now starting to converge…
Eric: … so it could be that in ten year’s time, Mark, I could be talking to you about how you’re solving the energy problems of the world?
Mark: (Laughs) Yeah, energy distribution problems, that’s right.
Eric: Well, I look forward to that conversation, Mark. I’ve taken up a lot of your time, it’s been a great conversation, thank you very much for your time today.
Mark: You’re very welcome.
Remember, these are just some highlights from my very enjoyable conversation with Mark. On several topics, Mark went into quite a lot more detail than is presented here. The complete version is available on the podcast.