Oracle: service fulfilment

Company Profile

Oracle: service fulfilment

February 2014
John Abraham and Mark H. Mortensen

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Company summary

 Oracle is the world’s largest provider of enterprise software Figure 1: Oracle company facts [Source: Analysys Mason, 2014]
and a leading provider of computer hardware products and
services that are engineered to work together in the cloud Founded June 1977
and in the data centre.
Offices HQ in Redwood City, California
 The business is organised into three divisions: software,
hardware and services. Most of its software revenue comes Employees More than 120 000
from licensing databases, middleware, web-based Regional focus Worldwide
applications and cloud subscriptions.
Revenue USD37.2 billion (FY2013)
 Oracle also provides a broad selection of hardware systems
and related services including servers, storage, networking, Customers More than 400 000 customers worldwide
virtualisation software, operating systems and management
Partnerships More than 25 000 partners worldwide
software to support diverse IT environments including public
and private cloud computing environments. Company status Publicly traded (NASDAQ: ORCL)
 The services business is mainly comprised of consulting
services, managed cloud services and education services.
 It holds second position in the worldwide service fulfilment
software market, with an 11.1% market share of revenue in
2012.1 In the overall worldwide telecoms software market,
Oracle occupies fourth position with a 7.3% market share in
2012.
 This company profile focuses on Oracle’s telecoms service
fulfilment software solutions.
1 See Analysys Mason’s Service fulfilment systems: worldwide market shares 2012. Available
at www.analysysmason.com/SFshare2013.

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Company summary: financials

 Software accounts for almost 75% of Oracle’s overall Figure 2: Oracle’s service fulfilment revenue, worldwide, 2010–2012 [Source:
revenue of USD37.2 billion (2013 financial year), while Analysys Mason, 2014]
hardware brings in 14%, and services the remainder. 350
302

Revenue (USD millions)

300 276
 Oracle’s service fulfilment revenue has increased to well-
250 236
above the market average in the past 2 years. North America
(NA) and Europe, the Middle East and Africa (EMEA) 200
contributed almost 75% of Oracle’s overall service fulfilment 150
revenue in 2012.
100
 Oracle invested USD4.9 billion in research and development 50
in the 2013 financial year, an increase from the
0
USD4.5 billion it invested in the 2012 financial year. 2010 2011 2012
 Oracle is active in mergers and acquisitions. Recent
Figure 3: Oracle’s service fulfilment revenue by region, worldwide, 2012
acquisitions related to service fulfilment include Acme Packet [Source: Analysys Mason, 2014]
(USD2.1 billion), Nimbula and Tekelec. Oracle has a good
track record of acquiring and integrating companies.
8%
 Oracle has faced some challenges in ramping up its NA
hardware sales following its acquisition of Sun Microsystems 20%
40% EMEA
in 2009.
Total revenue:
 Oracle continues to invest significantly to improve its cloud USD302 million APAC
infrastructure and offerings. At present its cloud business has
LATAM
an annual run-rate of more than USD1 billion.
32%

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Company summary: strategic direction

 Oracle has a ubiquitous brand and widespread sales Figure 4: Oracle’s service fulfilment revenue by sector, worldwide, 2012
presence as a result of the Oracle Database, Sun Servers [Source: Analysys Mason, 2014]
and BEA middleware products. Oracle will use these to
further its presence and reach. 5%
16% Broadband
 At Oracle OpenWorld 2013, it announced its intentions to
move beyond BSS/OSS/SDP software for communications Mobile
service providers (CSPs) into the wider realm of Total revenue:
USD302 million 51%
communications software serving enterprises. Business
 Oracle pre-integrates its products into large-footprint 28%
solutions, but keeps open interfaces between products, PSTN
reaping the benefits of its open architecture. CSPs that are
increasingly looking for best-of-suite integrated solutions find
such offerings attractive. Figure 5: Oracle’s service fulfilment revenue by products or services,
worldwide, 2012 [Source: Analysys Mason, 2014]
 In addition to software, Oracle provides the operations
processes that best utilise the capabilities of the software.
Oracle products and services continue to be focused only on
Oracle solutions and suites and not third-party integration.
Products
 Oracle’s product heritage encourages strong support from
46% Total revenue:
implementation partners. However, Oracle continues to USD302 million
54%
expand its services work, but with great care to avoid too Services
much overlap with its partner SIs.
 It offers broad industry coverage, but lacks specialised
packages for some areas of the communications industry
such as service assurance.

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Oracle service fulfilment products overview
Figure 6: Oracle service fulfilment products overview [Source: Analysys Mason, 2014]
Solution
Oracle Communications Order and
Service Management (OSM)
Oracle Communications Unified
Inventory Management (UIM)
Oracle Communications ASAP
Oracle Communications IP Service
Activator (IPSA)
Oracle Communications Design
Studio
Oracle Communications MetaSolv
Solution (MSS)
Oracle Communications Network
Resource Management (NRM)
Oracle Communications Rapid
Service Design and Order Delivery
(RSDOD)
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Products and features
Oracle Communications OSM helps customers address the challenges in the end-to-end lifecycle of order management
from offer design and launch, through to order fulfilment and billing activation.
Oracle Communications UIM is an open, standards-based application that provides an intelligent inventory of
communications services and resources.
Oracle Communications ASAP provides a convergent service activation platform that automatically activates customer
services in a heterogeneous network and IT environment and also supports the activation of consumer and business
services in fixed and mobile domains.
Oracle Communications IPSA enables CSPs to efficiently provision a highly differentiated portfolio of IP/Ethernet
connectivity offers – such as IP/Ethernet VPNs, multicast VPNs, QoS and Bandwidth on Demand – in a complex,
heterogeneous network environment.
Oracle Communications Design Studio provides the technical catalogue and unified design environment that accelerates
the creation and delivery of Oracle Communications solutions by providing an efficient and consistent design experience
across the various fulfilment and resource management applications within the Oracle Communications portfolio.
Oracle Communications MetaSolv Solution (MSS) provides network service providers with an integrated, packaged
solution that includes ordering, workflow, inventory management and trouble management capabilities.
Oracle Communications NRM solution is an integrated, product-based solution that enables network service providers to
plan, build, optimise and transform their communications networks providing network inventory, discovery and
reconciliation, planning and optimisation and network order management. NRM consists of UIM/MSS, Network Integrity,
Network Intelligence and Design Studio.
Oracle Communications RSDOD solution is an integrated, product-based solution that enables CSPs to transform their
OSS environment, by facilitating the rapid design, launch and efficient delivery of new or modified services. The RSDOD
solution consists of OSM, UIM, ASAP, IPSA and Design Studio.
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Oracle Rapid Service Design and Order Delivery (RSDOD) solution

components
Figure 7: Oracle Rapid Service Design and Order Delivery (RSDOD) solution components [Source: Oracle, 2013]

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Key acquisitions and mergers

Figure 8: Oracle’s key acquisitions and mergers related to service fulfilment, 2006–2013 [Source: Analysys Mason, 2014]

Date Company Description

August 2013 Tekelec Tekelec was a leading provider of network signalling (diameter and SS7), policy control and subscriber data
management solutions for communications networks. The terms of the agreement were not disclosed.

June 2013 Acme Packet Acme Packet was a leading provider of session border control technology, which enables trusted delivery of next-
generation voice, data and unified communications (UC) services and applications across IP networks. It was
acquired for USD2.1 billion.

March 2013 Nimbula Nimbula was a provider of private cloud infrastructure management software. The terms of the acquisition were not
disclosed.

September 2007 Netsure Telecom Netsure Telecom was a provider of network intelligence and network data integrity software. It was acquired for
USD5 million.

October 2006 MetaSolv MetaSolv was a provider of OSS software solutions such as order management and activation. It was acquired for
USD219 million.

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Significant customers

Figure 9: Oracle‘s significant service fulfilment customers [Source: Analysys Mason, 2014]

Customer Country Scope

Telekom Malaysia transformed the delivery of next-generation IP-based triple-play, IPTV, Metro-E and IP VPN services on top of
a new fibre-based national broadband network with the deployment of an end-to-end BSS/OSS solution from Oracle. The initial
Telekom phases focused on the consumer services, with more recent phases supporting the enterprise services market with focus on
Malaysia
Malaysia Metro-E and IP VPN services. This delivered significant benefits including the automated design, assign and activation of complex
enterprise services, savings of more than 8000 man hours provisioning effort per month in year 1, reduction in installation time by
30%, increased monthly order volume by 54%, reduced fall-outs by 91% and reduced repeat faults by 93%.

Vodafone India, the second-placed mobile operator in India, selected and rapidly deployed Oracle’s OSS solution to increase its
portfolio of fixed business services to large MNCs, Indian corporations, SMEs, government and public sector undertakings
(PSUs), other carriers and also to support the management of its large mobile backhaul and core network infrastructure. This
Vodafone India
solution enabled it to differentiate its offerings in the very competitive Indian market, resulting in a six-fold increase in enterprise
customer feasibility requests, improvements in service level agreement (SLA) compliance for B2B customers from 75% to 96%
and a three-fold increase in order volumes within 18 months.

LG Uplus, the second-largest telecoms provider in South Korea, deployed Oracle’s OSS solution to support diverse fixed and
mobile converged services and also support new network technologies (4G/LTE, for example) and corporate consolidation.
LG Uplus Korea The solution helped LG Uplus successfully deploy the world’s first nationwide 4G LTE network, with more than 5.2 million, or 50%
of LG Uplus subscribers being LTE subscribers.

Turkcell Superonline offers fixed enterprise and consumer services over a contemporary fibre-based network infrastructure. The
company wanted to lay the foundation for success in the high-speed data access market by creating service offerings compatible
Turkcell with various access technologies, reducing offer design and fulfilment times and working to improve the overall customer
Turkey experience, while also implementing its own fibre broadband network.
Superonline
The company deployed Oracle’s OSS solution to roll out fibre-based services to homes and buildings across 12 cities in Turkey. It
reduced the offer time to market by up to 75% and reduced fall-out rates by around 70%.

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Analysis: strengths, weaknesses, opportunities and threats
Strengths
 Oracle service fulfilment offers a well-defined product-based
solution approach that is complete, open and standards-
aligned.
 Oracle has strong direct and indirect distribution channels,
with systems integrators to provide local support.
 It has an excellent track record of acquiring companies and
integrating technologies into its product suite.
 Its broad product portfolio and telecoms-specific software
ensures its relevance at all levels within CSPs.
Weaknesses
 Oracle is facing challenges in expanding the hardware side
of its business – it is a unique strategy that has not yet
proved itself to provide competitive advantage
commensurate with its cost.
 Oracle has a weak market presence in the Latin America
(LATAM) region for its service fulfilment offerings.
 Oracle’s inventory offerings are more complex than those of
its competitors.
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Opportunities
 Oracle continues to expand its portfolio of offerings through
strategic acquisitions that also expand its regional presence
and customer reach.
 Oracle has a large geographical footprint and has a product
presence among most Tier-1 CSPs, which offers significant
opportunities for cross-selling.
 Oracle’s strong brand in emerging markets gives it excellent
account reach in these important areas.
Threats
 Large competitors such as Amdocs, Ericsson, and
NEC/NetCracker all offer more-substantial services
offerings, which are of increasing interest to CSPs seeking
to reduce their opex costs.
 Large IT vendors, such as Hewlett Packard and IBM,
together with their partners, compete directly with Oracle’s
hardware offerings.
 Oracle may continue to expand its services work, potentially
leading to greater overlaps with its partner SIs.
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