Being an OSS product supplier to telecom operators is a tough business. There is a constant stream of outgoings on developer costs, cost of sale, general overheads, etc. Unfortunately revenue streams are rarely so smooth. In fact, they tend to be decidedly lumpy – unpredictable (in terms of timelines when forecasting inflows years in advance) but large spikes of income stemming from customer implementations.
Not only that, but the risks are high due to the complexity and unknowns of OSS implementation projects as well as the lack of repeatability that was discussed in yesterday’s post.
Enduringly valuable businesses achieve their status through predictable, diversified, recurring (and preferably growing) revenue streams, so they need to be objectives of our OSS business models.
Annual maintenance fees (usually in the order of 20-22% of up-front list prices) is the most common recurring revenue model used by OSS product suppliers. Transaction-based pricing is another common model.
Cloud subscription (consumption) based models are also becoming more common, although there are always challenges around convincing carriers of the security and sovereignty of such important tools and data being hosted off-site.
I’m fascinated with the platform-plays, like Salesforce, which is a mushrooming form of the subscription model because there’s an ecosystem (or marketplace) of sellers contributing to transaction volumes. OSS and BSS are the perfect platform play but I haven’t seen any built around this style of revenue model yet. [Please let me know if I’ve missed any].
It has also been interesting to observe Cisco’s market success on the back of a perceived revenue shift towards more software and services.
Whenever considering alternate revenue models, I refer back to this great image from Ross Dawson:
Do any apply to your OSS? Can any apply to your OSS?
Tomorrow we’ll discuss OSS professional services revenues and the contrasting mindset compared with products.
Over the years, I’ve often referred to The Corkscrew Analogy or Momentum Spiral to describe a mindset of incremental improvement that’s needed to keep an
We’ve embarked on a journey of trying to plan for the future of OSS/BSS, not by predicting the future, but by seeking ways to be
As discussed in the previous article, “Future Scenario Planning: Have you given up on doing an OSS transformation? (part 1)” part of the fun of
Earlier in the week, a friend mentioned he was reading “Alchemy” by Rory Sutherland. It’s not an OSS book per se, but does provide some
Here at Passionate About OSS, we are exactly that – Passionate About OSS (Operational Support Systems). We’re also passionate about BSS, NMS, or any other names you call the tools that help to operationalise your network.
