Modern inventory management systems: market review and pricing models

Research Report

Modern inventory management systems:

pricing models and market review
January 2014
Mark H. Mortensen and John Abraham

Analysys Mason Limited 2014

Modern inventory management systems: market review and pricing models

Contents
Slide no.

Slide no.

6.

Executive summary

22. Business environment

7.

Executive summary

23. Inventory management systems vendor market shares [1]

8.

The modern inventory management systems innovation adoption curve

24. Inventory management systems vendor market shares [2]

9.

Recommendations

25. The inventory management system market will continue to grow as

federation and transformation projects increase

10. Recommendations for CSPs

11. Recommendations for suppliers
12. Market definition
13. Telecoms software market segmentation
14. Service fulfilment sub-segment definitions
15. Inventory management
16. General requirements of modern inventory management systems
17. Traditional fixed service fulfilment information flow
18. Modern service fulfilment information flow
19. Inventory management system transformation projects are phased
20. Specific features and functionality of inventory management systems [1]
21. Specific features and functionality of inventory management systems [2]

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26. As transformations increase, the inventory system market will shift its
focus towards IP infrastructure, IT-like equipment, and services
27. We include outside plant systems as part of the engineering systems
sub-segment of service fulfilment
28. The business environment in 20122013
29. Regional outlook
30. Pricing models

31. System comparisons and historical pricing models

32. Ericsson is primarily a services and equipment company, but Granite
Inventory is very configurable software
33. Ericsson also acquired the traditional RBOC inventory management and
design systems from Telcordia these are still in use today

Modern inventory management systems: market review and pricing models

Contents
Slide no.

Slide no.

34. Amdocs is a BSS powerhouse and gained a strong inventory

management system offering when it acquired Cramer

46. Ericsson

35. NetCracker operates as a separate division of NEC and is involved in

services work as well

48. Oracle

36. Oracle has grown by acquisition and integration

37. Current pricing models in effect and potential changes
38. Methodology and pricing model considerations
39. Pricing models used by most vendors
40. Larger enterprise-level deals, and one of the major vendors structures
its prices according to the number of items in the inventory
41. Another major vendor uses a very complex pricing model
42. New pricing models are beginning to emerge, driven by the move to
IORZ-WKURXJKprovisioning

47. NEC/NetCracker
49. Visionael

50. Vendor analysis

51. Vendor analysis summary: geography and service [1]
52. Vendor analysis summary: geography and service [2]
53. Mergers and acquisitions
54. Mergers and acquisitions
55. About the authors and Analysys Mason
56. About the authors
57. About Analysys Mason

43. Vendor snapshot

58. Research from Analysys Mason

44. Amdocs

59. Consulting from Analysys Mason

45. Comarch

Analysys Mason Limited 2014

Modern inventory management systems: market review and pricing models

List of figures
Figure 1:

Inventory PDQDJHPHQWV\VWHPVIHDWXUHVSRVLWLRQRQWKH
innovation adoption curve, worldwide

Figure 10: Inventory management system revenue by region, worldwide,

20122017

Figure 2:

Telecoms software market segments

Figure 3:

Definitions of service fulfilment sub-segments

Figure 11: Inventory management system revenue by telecoms service,

worldwide, 20122017

Figure 4:

Inventory management system key functions

Figure 5: Traditional fixed service fulfilment information flow

Figure 6: Modern service fulfilment information flow

Figure 7: Typical phased IM system transformation process

Figure 8: Inventory management market shares by revenue, worldwide,
2012
Figure 9: Inventory management system revenue, worldwide, 20122017

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Figure 12: Fixed network planning and optimisation software VXSSOLHUV

market share by revenue, worldwide, 2011
Figure 13: 2UDFOHVBSS/OSS coverage overview
Figure 14: Inventory management system pricing model, a major vendor
Figure 15ab: Comparison of service fulfilment suppliers by region and
service sector
Figure 16: Key mergers and acquisitions in the service fulfilment market,
20042011

Modern inventory management systems: market review and pricing models

About this report

Our last report that focused on inventory management (IM) systems was published nearly a decade ago. At that time, IM systems
were just making their way into a market dominated by spreadsheets and home-grown relational database systems. Now, nearly all
communications service providers (CSPs) have implemented IM systems from commercial vendors for their new services and
many are undergoing transformation projects to consolidate the many legacy IM systems still in use.
This report focuses on:
 the functionality of modern IM systems
 how IM systems fit into the overall BSS/OSS architecture
 how modern IM system transformation projects are implemented
 23 vendors in the IM systems market, particularly the top-six in terms of revenue in 2012 Ericsson, NEC/NetCracker, Amdocs,
Oracle, Visionael and Comarch
 the pricing models that leading vendors have adopted.
This report is aimed at:
 newcomers to this area, who will find substantial tutorial information and a review of the major players in the IM systems market
 all CSPs (fixed and mobile) that are embarking on a transformation project to replace and consolidate their IM systems and seek
to understand more about the advantages and disadvantages of the various strategies
 CSPs that wish to know the areas of proven and speculative innovations in modern IM systems and understand the best
current practices
 software vendors that wish to benchmark their IM systems against an industry maturity curve.

Analysys Mason Limited 2014

Modern inventory management systems: market review and pricing models

18

Modern service fulfilment information flow

Modern service fulfilment architecture blurs the traditional
OSS/BSS lines.

Figure 6: Modern service fulfilment information flow [Source: Analysys

Mason, 2014]

Orders from CRM or subscriber management systems are

passed to customer order orchestration systems that
decompose complex, multi-product orders and orchestrate
the overall order.

Customer care
Subscriber
management

CRM

Partner CSPs,
third-party
vendors

Customer order orchestration

Catalogue
Order management

Inventory

Inventory

Activation

Activation

Network and
element
management
systems
(NMS/EMS) for
technology A

NMS/EMS for
technology B

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Activation systems directly interfaced with customer order

orchestration (or OM) systems when a simple activation is
required.

Activation

Service
delivery
platforms
(SDPs)

Service
fulfilment

Engineering systems

Order management

Sub-orders are passed to multiple service fulfilment

technology stacks for further decomposition, management,
design and assign, and activation. Some sub-orders go to the
systems of partner CSPs or third-party vendors.

The BSS and OSS components each need data about the
products and services required in order to fulfil the orders.
This data is stored in multiple product catalogues, federated
or manually synchronised.
Engineering systems have evolved into full systems, with
databases integrated into inventory and other service
fulfilment OSS systems and processes.

Modern inventory management systems: market review and pricing models

19

Inventory management system transformation projects are phased

7KHVHWUDQVIRUPDWLRQSURFHVVHVGRQRWXVHWKHELJ
EDQJDSSURDFKIURPDGHFDGHDJR,QVWHDGWKH\XVH
agile-like methodology and implement the
transformation in approximately six phases, each
lasting 36 months.
The first phase typically focuses on a narrow range of
technologies, services or customers.
The later phases can be based on technologies,
services or customers, or a mix of these three, with the
largest populations done in later phases.

These phased, agile, departmental-sized

transformation processes are less risky than largescale transformation processes. All parties the CSP,
the vendor and the SI (if involved) gain knowledge of
how to do the necessary data cleansing, data
movement and transformation, and process re-design,
making each additional phase easier.

Analysys Mason Limited 2014

Figure 7: Typical phased IM system transformation process [Source: Analysys

Mason, 2014]

Phase 1

Phase 2

Customer care

Customer care

Order management
for A

Legacy
OM

Inventory for A

Inventory
for B

Activation for A

Activation
for B

NMS/EMS
for technology A

NMS/EMS
for technology B

Manual operation

Many CSPs are undertaking transformation projects

for IM systems and for the entire service provisioning
process.

Order management
for A and B
Inventory for A and B

Activation for A

Activation for B

NMS/EMS
for technology A

NMS/EMS
for technology B

In later phases, the scope of the IM system, and the

provisioning process, grows to encompass other areas

Modern inventory management systems: market review and pricing models

Executive summary
Recommendations
Market definition
Business environment
Pricing models

Vendor snapshot
Vendor analysis
Mergers and acquisitions
About the authors and Analysys Mason

Analysys Mason Limited 2014

55

Modern inventory management systems: market review and pricing models

56

About the authors

Mark H. Mortensen 3ULQFLSDO$QDO\VWLVWKHOHDGDQDO\VWIRU$QDO\V\V0DVRQVCustomer Care and Service
Fulfilment research programmes, which are part of the Telecoms Software research stream. His interest areas
include customer self-care, automation of fulfilment processes, and data and software architecture for agile, realWLPHV\VWHPV7KHILUVW\HDUVRI0DUNVFDUHHUZHUHVSHQWDW%HOO/DERUDWRULHVZKHUHKHGLVWLQJXLVKHGKLPVHOIE\
starting software products for new markets and network technologies, and designing the interaction of BSS/OSSs
with the underlying network hardware. Mark was Chief Scientist of Management Systems at Bell Labs, and has also
been president of his own OSS strategy consulting company, CMO at the inventory specialist Granite Systems, VP
of Product Strategy at Telcordia Technologies, and SVP of Marketing at a network planning software vendor. Mark
holds an MPhil and a PhD in physics from Yale University and has received two AT&T Architecture awards for
innovative software solutions. He is also an adjunct professor at UMass Lowell in the Marshall School of
Management, specialising in business strategy.
John Abraham $QDO\VWLVDPHPEHURI$QDO\V\V0DVRQV7HOHFRPV6RIWZDUHUHVHDUFKWHDPDQGFRQWULEXWHVWR
the Revenue Management, Service Fulfilment and Customer Care SURJUDPPHV+HKDVPRUHWKDQILYH\HDUV
experience in the telecoms industry. He has worked for a global OSS vendor and implemented revenue
management solutions for Tier 1 telcos in Europe, India and the Middle East. John joined Analysys Mason in early
2012. He holds a bachelors degree in computer science from Anna University (India) and an MBA from Bradford
University School of Management (UK).

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Modern inventory management systems: market review and pricing models

57

About Analysys Mason

.QRZLQJZKDWVJRLQJRQLVRQHWKLQJ8QGHUVWDQGLQJKRZWRWDNHDGYDQWDJHRIHYHQWVLVTXLWHDQRWKHU2XUDELOLW\WRXQGHUVWDnd the
complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist
knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.

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Modern inventory management systems: market review and pricing models

Research from Analysys Mason

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Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research
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Modern inventory management systems: market review and pricing models

Consulting from Analysys Mason

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Our clients in the telecoms, media and technology (TMT)
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Our focus is exclusively on TMT. We advise clients on

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Modern inventory management systems: market review and pricing models

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