Yesterday’s post, “Would an OSS duopoly be a good thing?” talked about the benefits and challenges of consolidation of the number of suppliers in the OSS market.
I also promised that today I’ll share an example of the types of challenge that can be faced.
An existing OSS supplier (Company A) had developed a significant foot-hold in the T1 telco market around Asia. They had quite a wide range of products from their total suite installed at each of these customers.
Another OSS supplier (Company X) then acquired Company A. I wasn’t privy to the reasoning behind the purchase but I can surmise that it was a case of customer and revenue growth, primarily to up-sell Company X’s complementary products into Company A’s customers. There was a little bit of functionality overlap, but not a huge amount. In fact Company A’s functionality, if integrated into Company X’s product suite, would’ve given them significantly greater product reach.
To date, the acquisition hasn’t been a good one for Company X. They haven’t been able to up-sell to any of Customer A’s existing customers, probably because there are some significant challenges relating to the introduction of that product into Asia. Not only that, but Company A’s customers had been expecting greater support and new development under new management. When it didn’t arrive (there were no new revenues to facilitate Company X investing in it), those customers started to plan OSS replacement projects.
I understand some integration efforts were investigated between Company A and Company X products, but it just wasn’t an easy fit.
As you can see, quite a few of the challenges of consolidation that were spoken about yesterday were all present in this single acquisition.Read the Passionate About OSS Blog for more or Subscribe to the Passionate About OSS Blog by Email