Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
2015
2015 Global Stratecast CSP Billing – Rating Charging Market Leadership Award
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 2 “We Accelerate Growth”
Contents
Background and Company Performance ..................................................................... 3
Introduction .................................................................................................... 3
Industry Challenges .......................................................................................... 4
Ericsson .......................................................................................................... 5
Market Leadership of Ericsson ............................................................................ 7
Conclusion ..................................................................................................... 11
Significance of Market Leadership ........................................................................... 12
Key Performance Criteria ....................................................................................... 13
The Intersection between 360-Degree Research and Best Practices Awards .................. 14
About Stratecast .................................................................................................. 14
About Frost & Sullivan .......................................................................................... 14
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 3 “We Accelerate Growth”
Background and Company Performance
Introduction
The Frost & Sullivan Stratecast Operations, Data Analysis & Monetization (ODAM) Global
Competitive Strategies team is preparing a major update for its report series covering the
communications service provider (CSP) end-to-end monetization solution market as shown
in the figure below.
Suppliers that deliver monetization functionality in one or more of the following categories
are included in this report series based on the following functionality sectors:
• Billing Mediation
o On-line and Off-line Mediation (in support of monetization)
• Rating & Charging and Other Core Billing
o Rating & Charging, Balance Management, and Customer Notification
o Invoicing, Receivables, and Other Core “Back Office” Billing Functions
• Policy Management
o Policy Rules Function
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 4 “We Accelerate Growth”
o Policy Enforcement Function
• Interconnect & Settlement and Partner Management
o Wholesale Interconnect & Financial Settlement (CSP to CSP)
o Partner Relationship Management (CSP to Other Partners)
Frost & Sullivan Stratecast will release five reports over 2Q and 3Q 2015 that address a
market share analysis and long-term forecast for each of the functional portions of end-to-
end CSP billing. Already published, the first assessment report in this series is a market
share analysis of the overall billing market.1 In addition, two more reports, to be released
in the second half of 2015, will provide an in-depth strategic analysis of the drivers and
business trends affecting each component of end-to-end CSP billing along with a detailed
assessment of the more than 100 suppliers that provide some level of billing functionality.
Industry Challenges
The Frost & Sullivan Stratecast global CSP billing market share report series provides a
five-year revenue forecast and a base year market share analysis for the end-to-end
billing market. It also provides the same analysis for each of the major functional
components that define this market. All are expressed in US dollars. The billing report
series covers the period from 2015–2019, utilizing a base year of 2014. As in previous
Frost & Sullivan Stratecast forecasts, each market share and forecast report in this series
is based on the revenue generated by supplier offerings in one or more of the six related
global billing segments including:
• Part 2 – Billing Mediation
• Part 3 – Rating & Charging
• Part 3 – Other Core Billing (invoicing, collections, payments, accounts receivable,
promotions management, loyalty management, and journaling)
• Part 4 – Policy Management (rules function only)
• Part 5 – Interconnect & Settlement
• Part 5 – Partner Management
In the soon to be released Frost & Sullivan Stratecast report, Global CSP Billing 2015
Edition Part 3: Rating & Charging and Other Core Billing Market Forecast and Market
Share Analysis, Frost & Sullivan Stratecast analysts examine the rating & charging market
in greater detail.
Ericsson leads in market share for the global CSP rating & charging market, with
1 See recently released Frost & Sullivan Stratecast report OSSCS 16-04, Global CSP Billing 2015 Edition Part 1: End-to-End CSP Billing Market Forecast and Market Share Analysis, May 2015.
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 5 “We Accelerate Growth”
approximately 16% of this market. The next 4 competitors control approximately 15%,
13%, 10%, and 8% of the market respectively. In addition, Ericsson is among the leaders
in all six segments of the end-to-end billing process.
For the 2015 edition of the billing report series, Frost & Sullivan Stratecast interviewed
more than 100 billing suppliers that address one or more of the above mentioned market
segments. Frost & Sullivan Stratecast revenue estimates include vendors with software
solution offerings that obtain revenues from license fees, maintenance fees, services
associated with the initial installation and configuration of a solution, service bureau fees,
cloud services fees, and installed solutions managed by a supplier. Internal CSP spending
on business support and billing processes that are attributed to internal work teams or
assistance from professional services consulting resources is not included. In addition,
hardware-related revenue and revenue generated by systems integrators or companies
without their own billing solutions is not included. The professional services fees for
integration of new solutions with existing systems and updates to CSP business processes
are also not included in the forecast.
All revenue forecasts are developed by analyzing multiple sources including information
supplied to Frost & Sullivan Stratecast through a direct market questionnaire, information
from public sources, direct interviews, and raw market data. The analysis is developed
from 2014 company-level revenues, projections of future earnings, global financial market
insights, as available, and our strategic acumen concerning the billing functions.
To obtain estimated revenues for this five-year market forecast, Frost & Sullivan
Stratecast uses a modified Delphi method for revenue analysis. Factors such as known
deployments, publicly and privately reported revenue, customers served, press releases,
financial reports, estimated cost of deployments, and related information are analyzed by
a multi-person analyst team, each working independently, to estimate each vendor’s 2014
revenues, where such was not specifically provided. Final estimates are iterated to reach a
consensus using a 90 percent confidence interval. From the base year level, the five-year
forecast is established using insights about specific company directions, events, customer
comments, general business insight, global economic indicators, and our strategic insight
concerning each billing sub-sector.
Ericsson
Ericsson is a provider of communications infrastructure, services and multimedia solutions,
based in Stockholm, Sweden. It is traded publicly on the Stockholm Stock Exchange and
on the NASDAQ under the symbol of ERIC. The company employs over 118 thousand
people worldwide. Ericsson reported 2014 revenue of approximately 228 billion SEK (U.S.
$33.2 billion.) The company traces its origins to 1876, and today continues to offer its
network equipment, services, and software solutions to service providers around the
world.
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 6 “We Accelerate Growth”
The company features two integrated business support solutions—which can be
combined—that cover all segments of billing and policy management:
• Ericsson Charging and Billing in One – Incorporates functionality from the
Ericsson Charging System and BSCS iX billing products into a fully integrated end-
to-end convergent solution. It is a single solution for all types of subscribers and
services, both retail and wholesale, covering customer, product and order
management, discount and promotion handling, balance management, invoicing,
finance, collections, partner settlement, and real-time rating.
• Ericsson Integrated Policy and Charging – Brings together the 3GPP OCS, with
the Ericsson Charging System solution, along with the PCRF (Ericsson Service
Aware Policy Control).
Charging and Billing in One’s real-time rating and charging capabilities are based on the
Ericsson Charging System product. The company explained to Frost & SullivanStratecast
that the Ericsson Charging System is a scalable, flexible solution that delivers decoupling,
configurability, convergent real-time charging , and a strong user-experience focus. The
Ericsson Charging System supports configurable tariffs, personalized service bundles that
combine data and voice and fixedmobile telephony, along with targeted data offerings
based on multiple parameters.. The account types are configurable and include single-
user, multi-user, shared, dedicated, and composite dedicated accounts.
The flexibility of the Ericsson Charging System allows individual subscribers to choose not
only which services they need, but also how they wish to pay for them. As an example,
Ericsson reports to Frost & Sullivan Stratecast that a subscriber can pick voice,
messaging, and data services, and use a postpaid plan for voice and messaging while
opting for a prepaid plan for data. The Ericsson Charging System allows CSPs to stimulate
service usage by adjusting tariffs or offering discounts in real time, based on accumulated
usage. CSPs can also base personalized promotions on refill channels, amounts, account
status, subscriber profile, voucher type, or location.
The company also explains that the Ericsson Charging System is based on a modular
architecture with scalability in all parts of the system. Open, published interfaces, and
compliance with the latest technology standards mean that it can support long-term
convergent business strategies while adapting to emerging technologies and business
models.
Real-time mediation, policy-enabled rating & charging, and even partner management,
are all central to the new customer services environment that technology advances, user
device evolution, regulatory demands, and the capabilities from other industries bring
today to the communications marketplace. Tightly integrated solutions covering the full
end-to-end billing domain are fast becoming a preferred method of implementation, as in-
house CSP expertise continues to dwindle. More challenging, however, is the ability for a
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 7 “We Accelerate Growth”
CSP to work with installed systems, and seamlessly evolve from one generation of billing
solution to the next; not a trivial matter.
A clear migration strategy and implementation approach for moving from installed
systems to the more capable billing solution offerings that meet today’s changing business
needs is sorely needed. Such transition projects are time consuming, full of challenges,
often go over budget and under-deliver. Still, transitioning from the large numbers of
installed systems that many CSPs now have is essential for on-going business success, as
change continues and operational costs escalate.
Frost & Sullivan Stratecast firmly believes that Ericsson has the proper capabilities, in
both software and knowledgeable resources, to make the transition from currently
installed systems to new solutions and business processes that are essential for
addressing the needs of the evolving communications marketplace.
The Ericsson charging and billing and policy solution solutions offer much in the way of
business support capability; while Ericsson’s managed solutions offerings can be an
effective alternative to continued license ownership of a CSP’s billing functions. Ericsson
also offers a strong services organization to support implementation and integration
efforts. Frost & Sullivan Stratecast expects Ericsson to continue to grow its customer base
and revenues in the coming months. Ericsson will likely remain a leader in nearly every
segment of the end-to-end billing space. This is especially important as the next stage of
technology evolution advances with the business and operations management
requirements associated with virtualized networking.
Market Leadership of Ericsson
The 2015 Frost & Sullivan Stratecast Global Market Leadership Award in CSP Billing for the
Rating & Charging Market is judged based on ten criteria described later in this report.
Ericsson was directly compared against two other leading suppliers in the rating &
charging space. They are referred to as Competitor 2 and Competitor 3 through the
remainder of this document.
The following is a selection of the comparisons from these ten criteria. The data behind
the comparisons comes from the upcoming Frost & Sullivan Stratecast report on the global
CSP rating & charging market share and forecast assessment report.
Growth Strategy Excellence
Frost & Sullivan Stratecast examines the end-to-end CSP billing market and the
components that define this market, every year. End-to-end CSP billing and most of the
parts that make up this market have grown over the last six years. One of these growth
segments is rating & charging. Rating & charging is also the largest CSP billing segment
by revenue by a considerable margin. Frost & Sullivan Stratecast forecasts the five-year
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 8 “We Accelerate Growth”
compound annual growth rate (CAGR) for the rating & charging segment to continue to
climb at a mid-single-digit rate from 2015-2020, slightly below the rate for the overall CSP
billing market.
Frost & Sullivan Stratecast has identified 11 revenue leaders that address the needs of
more than 80% of the global CSP billing market by revenue. Of these 11, six grew at or
above the growth rate for the overall CSP billing market and maintained or increased
market share as a result. Ericsson, tied for second place as identified in the Frost &
Sullivan Stratecast end-to-end billing market share analysis, grew by two percentage
points. In the rating & charging segment, Ericsson maintained its market share leadership,
with 16% of the market.
Competitor 2 and Competitor 3 offer very similar solution profiles to Ericsson in the rating
& charging market and both are among the revenue leaders in this billing function domain.
Both have exhibited strong market growth.
Competitor 2 has narrowed the revenue gap with Ericsson, but remains one percentage
point behind Ericsson at 15% of the global rating & charging market. Competitor 3 also
narrowed the revenue gap with Ericsson, but remains three percentage points behind
Ericsson with 13% of the rating & charging market.
Implementation Excellence
To be a leader in CSP billing, in an individual segment of CSP billing, or in any of the areas
of CSP Operations, Data Analysis & Monetization, a supplier must be able to implement
the solutions they have sold; each and every time. An implementation that goes less
smoothly than planned, can cause a CSP to lose trust in a supplier; an implementation
that fails can have reverberations far beyond the individual CSP customer. The CSP
community (and analyst community) is relatively small and less than expected results are
noted throughout the industry, sometimes for an extended time.
Frost & Sullivan Stratecast's knowledge of the excellence in implementation with regard to
Ericsson is well founded based on several customer testimonials, continued press from the
company that identifies CSPs by name, and the ongoing discussions Frost & Sullivan
Stratecast has with both Ericsson and its competitors. Together, these factors indicate
that Ericsson is keeping its existing customers happy as it continues to gain new ones.
Competitor 2 and Competitor 3 each have experienced revenue growth.
Brand Strength
Brand is often of great importance to a customer when choosing a product for purchase.
This is true of consumer goods and it holds for CSPs when they choose their Operations,
Data Analysis & Monetization systems with price tags that usually reach into the millions
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 9 “We Accelerate Growth”
of dollars. In the area of CSP end-to-end billing, CSPs are trusting their ability to generate
revenue, and even in their ability to stay in business, on a vendor — trust in a company
and a brand is of utmost importance.
Brand strength is not something Frost & Sullivan Stratecast measures directly, but
increasing revenues correlate strongly with CSP trust in a brand. Ericsson increased its
revenues and CSP customer base over the past year. This indicates through example that
Ericsson's brand strength is significant and has increased since Frost & Sullivan
Stratecast’s previous examination of the CSP Billing market and associated market
segments in 2012.
Competitor 2 and Competitor 3 have also increased revenues and by correlation, brand
strength.
Product Quality
Similar to the previous two criteria, product quality is very important to CSPs, who expect
any solution they purchase to work as advertised. Poor quality solutions immediately
cause issues with the CSP customer and, as mentioned under the implementation section
of this report, bad news travels fast, which is hard to overcome.
Ericsson’s continued growth over the last few years, one of the highest rates amongst the
revenue leaders, is a strong indicator that its CSP customers find the company's products
and solution delivery capabilities to either meet or exceed expectations.
Competitor 2 and Competitor 3 have also increased revenues, indicating that both of these
organizations are experiencing positive market perceptions with regard to product quality.
Customer Ownership Experience
While Ericsson and its two competitors share many similarities, they also present different
business models in how they interact with their customers. Frost & Sullivan Stratecast
examines the delivery model of each supplier, including determining the percentage of
revenues that come from licensing a product versus the percentage of revenues that come
from services. Many companies are proud that they generate most of their revenue from
license sales and maintenance fees, positing that fact reflects positively on the quality of
their software. But it also assumes that their customers, the CSPs, want to operate the
software without help from the supplier.
Ericsson offers its customers a choice; license the software and run it internally, or license
the software and Ericsson will operate it for them. Ericsson realizes that some of its
customers want the company to deliver the software and take ownership of the entire
billing process. Ericsson has a very strong services organization that runs the
monetization process as well as many telecom networks at some of the largest CSPs in the
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 10 “We Accelerate Growth”
world. A customer that pays Ericsson to deal with the day-to-day operations — and
continues to pay Ericsson year after year for this service — is a customer whose
ownership experience is excellent. Ericsson takes care of all the details and continues to
do it at or above its customer’s satisfaction.
Competitor 2 has learned this lesson and also sports a very strong services organization.
Competitor 2 also uses its service organization to operate the monetization processes for
some of its customers, much the same way as Ericsson does today.
Competitor 3 generates a large percentage of its revenues from services, but much less
from the running of its customers’ monetization process and much more from the
installation and integration of its software. Again, as above, this is not an indictment of
the license model, but the customer ownership experience of a CSP that runs its own
monetization process tends to be “harder” than one that pays a vendor to do it, assuming
that the vendor does a good job.
Customer Service Experience
Customer service is very important to CSPs, who expect any solution they purchase to
work as advertised and their suppliers to always put their experience as the top of the list.
Poor quality solutions immediately cause issues with the CSP customer and degrade their
service experience.
Ericsson’s continued growth over the last few years, one of the highest rates amongst the
revenue leaders, is a strong indicator that its CSP customers find Ericsson's customer
service experience to meet or exceed expectations. Ericsson has had a solid "can do"
attitude for several years, in delivering solutions that meet all customer expectations.
With this approach to business, CSP customers are finding that Ericsson solutions can and
do meet expectations.
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 11 “We Accelerate Growth”
Conclusion
Frost & Sullivan Stratecast has taken a deep dive into the changing communications
marketplace, and evaluated the role of billing and policy management within the
communications service provider (CSP) business support system and monetization
functions. Frost & Sullivan Stratecast analysts interviewed and analyzed over 100
suppliers, covering various aspects of the end-to-end CSP billing marketplace. CSP billing
is defined as including six related segments: Billing Mediation; Rating & Charging; Other
Core Billing functionality; Policy Management (rules function); Interconnect & Settlement;
and Partner Management capabilities.
Ericsson leads in market share for the base year of 2014 for CSP rating & charging. Frost
& Sullivan Stratecast estimates that Ericsson controls approximately 16% of the rating &
charging market. In addition, Ericsson is among the leaders in the overall CSP billing
market and in all six billing sectors. Therefore, Frost & Sullivan Stratecast presents the
2015 Global Market Leadership Award in CSP Billing for the Rating & Charging Market to
Ericsson, with a 16% share of this market.
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 12 “We Accelerate Growth”
Significance of Market Leadership
Ultimately, growth in any organization depends upon customers purchasing from a
company, and then making the decision to return time and again. Loyal customers
become brand advocates; brand advocates recruit new customers; the company grows;
and then it attains market leadership. To achieve and maintain market leadership, an
organization must strive to be best-in-class in three key areas: understanding demand,
nurturing the brand, and differentiating from the competition.
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 13 “We Accelerate Growth”
Key Performance Criteria
For the Global Market Leadership Award, Frost & Sullivan Stratecast analysts focused on
specific criteria to determine the areas of performance excellence that led to the
company’s leadership position.
Criterion Requirement
Growth Strategy Excellence
Demonstrated ability to consistently identify,
prioritize, and pursue emerging growth
opportunities
Implementation Excellence
Processes support the efficient and consistent
implementation of tactics designed to support the
strategy
Brand Strength The possession of a brand that is respected,
recognized, and remembered
Product Quality
The product or service receives high marks for
performance, functionality and reliability at every
stage of the life cycle
Product Differentiation
The product or service has carved out a market
niche, whether based on price, quality, uniqueness
of offering (or some combination of the three) that
another company cannot easily duplicate
Technology Leverage
Demonstrated commitment to incorporating leading
edge technologies into product offerings, for
greater product performance and value
Price/Performance Value Products or services offer the best value for the
price, compared to similar offerings in the market
Customer Purchase Experience
Customers feel like they are buying the most
optimal solution that addresses both their unique
needs and their unique constraints
Customer Ownership Experience
Customers are proud to own the company’s product
or service, and have a positive experience
throughout the life of the product or service
Customer Service Experience Customer service is accessible, fast, stress-free,
and of high quality
BEST PRACTICES RESEARCH
© Stratecast | Frost & Sullivan 2015 14 “We Accelerate Growth”
The Intersection between 360-Degree Research and Best Practices Awards
Frost & Sullivan's 360-degree research methodology represents the analytical rigor of our
research process. It offers a 360-degree-view of industry challenges, trends, and issues
by integrating all 7 of Frost &
Sullivan's research methodologies. Too
often, companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth
strategies are founded on a thorough
understanding of market, technical,
economic, financial, customer, best
practices, and demographic analyses.
The integration of these research
disciplines into the 360-degree
research methodology provides an
evaluation platform for benchmarking
industry players and for identifying
those performing at best-in-class
levels.
About Stratecast
Stratecast collaborates with clients to reach smart business decisions in the rapidly
evolving and hyper-competitive Information and Communications Technology markets.
Leveraging a mix of action-oriented subscription research and customized consulting
engagements, Stratecast delivers knowledge and perspective that is only attainable
through years of real-world experience in an industry where customers are collaborators;
today’s partners are tomorrow’s competitors; and agility and innovation are essential
elements for success.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best in class positions in growth, innovation and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best practice models to drive the generation, evaluation and implementation
of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 31 offices on six continents. To join our Growth Partnership, please visit
http://www.frost.com.
360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS
Technology
Obsolescence
Disruptive
Technologies
New
Applications
CEO
Demographics
Needs
and
PerceptionsSegmentation
Buying
Behavior
Branding
and
Positioning
Competitive
Benchmarking
Emerging
Competition
Competitive
Strategy
Capital
Investments
Availability
of
Capital
Country
Risk
Economic
Trends
Crowd
Sourcing
Growth
Strategies
Career
Development
Growth
Implementation
Industry
Evolution
New Vertical
Markets
Industry
Expansion
Industry
Convergence
Emerging
Technologies
Smart Cities
Sustainability
New Business
Cultures
GeoPolitical
Stability