Anyone keeping an eye on press releases must have noticed that SubexAzure have had a hot streak of sales. Recent announcements involving revenue assurance have covered the following regions:
If you apply a Boston Consulting Group matrix analysis to the revenue assurance software market, over time we should see the choice of suppliers thin down to SubexAzure, one major competitor, and a few others that will struggle to survive. At present, SubexAzure is the Coca-Cola of revenue assurance software. I dare not guess who best deserves to be described as the Pepsi to their Coke. If SubexAzure continue to exploit their market lead, then eventually we should end up in a situation where most people working in revenue assurance are either employed by SubexAzure or use their software at work. When that happens you get a Windows-like domination of a market; people struggle to imagine why they would opt for a competitor’s offering. The software market for revenue assurance is very niche and a lot less mature than it is for other software, but it should eventually exhibit the same patterns that turned OS/2, WordPerfect and Lotus 1-2-3 into the also rans of history.
You might have guessed that SubexAzure was going to dominate the market as the merger between Subex and Azure was taking place. Subex had an army of developers which few were likely to be able to compete with. Azure had already adopted a marketing strategy akin to that of Subex, making the growth of market share the top priority. SubexAzure has simply out-developed most of their smaller rivals, whilst benefiting from the efficiencies of selling the same products to a higher number of customers than most rivals. Having the highest market share should lead to a virtuous circle, as higher profits can be reinvested into maintaining a lead over rivals, and as perceived success translates into a more appealing sales proposition. One challenge might be how SubexAzure copes as their cost advantages are eroded. A higher standard of living in India will translate into increased costs and there is nothing to stop another part of the world emerging over time as a cheaper alternative. But that might take too long to pose any real risk. On a simple BCG-type analysis, SubexAzure should be able to retain their position in the revenue assurance market for the foreseeable future.
Over time, another kind of competitor may emerge to take on SubexAzure. Open source software often becomes the major competitor to the supplier that dominates a software market, in part because businesses that are failing might well open up their intellectual property. Doing so allows their existing customers the opportunity to gang together and maintain their existing software. There is also an emotional reason to free up intellectual property: the hope that it will save countless hours of work from becoming an evolutionary dead end. Open source should makes lots of sense for telecoms revenue assurance, as there is always plenty of work in tailoring each tool to the specifics of the business that uses it. Rather than making money from the code, you could see secondary entrepreneurs trying to profit from the implementation and integration, whilst not charging for the code itself. The reasons for and against acquiring open source revenue assurance software would be little different to the reasons for and against telcos developing their software in-house. Many of them have done that. So there are plenty of developers around the world who have some experience of writing code for revenue assurance. Add to them the many more developers who have worked for small businesses that lack the marketing power and hence cost efficiencies to compete with a SubexAzure. If open source gives those people a chance to gang together, and of competing with SubexAzure, I would not be surprised if they take it.