IBM, Oracle, and SAS are the leading providers of BI and analytics to telcos

OVUM VIEW

Summary

IT trends in the telecoms industry suggest big changes in how telcos deal with customer and operational data. Telcos seek state-of-the-art IT tools to improve efficiency, speed time to market, and reduce customer churn as they move steadily toward a software-driven service environment. Because margins are lower than they have been in the past, telcos are investing in BI and advanced analytics to improve efficiency and support business decision-making. There is strong vendor activity as technology suppliers enhance their capabilities to meet existing demands and anticipate new requirements. Ovum has analyzed the market to produce Ovum Decision Matrix: Business Intelligence and Analytics for Telcos to help telcos select the right BI and analytics solutions from the leading vendors according to their business requirements. SAS, IBM, Oracle, and HP, along with other, smaller vendors such as Tibco and QlikTech, are among the vendors addressing telcos’ evolving BI and analytics needs. Oracle, IBM, and SAS, each with mature and sophisticated offerings, are the overall leaders in the BI market for telcos.

Most vendors do not address the issue of achieving a 360-degree view of the customer

Realizing value from BI and analytics will require considerable investment from both vendors and telcos, particularly in the areas of interoperability and data integration. Despite their sophisticated databases, advanced analytics, and data visualization tools, vendors still struggle to address the daunting challenge of integrating IT and network data. Telcos view improved quality of customer experience and service personalization as key to reducing churn, but they still struggle to achieve a holistic view of each subscriber. They aim to achieve a 360-degree view of the customer that combines data from various siloed applications such as billing, customer care, and network operations. But overall, a true 360-degree view seems to be a distant dream; Oracle is the only vendor to have integrated numerous elements into a single solution.

However, the best route to that type of integrated view is still not clear. Just a handful of vendors have created truly pre-built departmental solutions; others believe that each telco requires a certain level of customization, so they create a unique model each time. Still, whatever their approach, vendors do have clearly defined plans and are working to integrate various aspects of billing and operating data. The industry is witnessing the early adoption of a model in which data is centralized and each department can access a holistic view of the customer and of operations.

Vendors add advanced analytics techniques, such as predictive analytics, to their BI offerings

To expand their offerings, BI vendors are increasingly developing or acquiring predictive analytics capabilities through alliances and acquisitions, and incorporating them into their core platforms. For example, IBM acquired SPSS in 2009 with the aim of integrating predictive analytics capabilities into the Cognos BI suite. The predictive analytics market is witnessing strong vendor activity, as vendors increasingly target telcos’ CRM, sales, marketing, and billing systems with sophisticated and telco-specific offerings.

Network analytics is a critical investment area

In developed economies, vendors are successfully selling advanced analytics mainly into two telco departments – marketing and customer lifecycle management – to improve customer acquisition and retention, and to boost upsell and cross-sell. Telcos intend to extend the use of advanced analytics to other business processes such as network failure and capacity planning. Some vendors included in this report have already made major investments to develop their network analytics capabilities. Of the vendors that we have analyzed, HP has developed the most comprehensive set of network analytics capabilities, which includes policy controls, authentication, and authorization. As telcos are still experimenting with network analytics, there is a huge opportunity for vendors.

When selecting BI and analytics solutions, telcos have more choices than ever before. Consequently, Ovum believes that each one is likely to find a solution well aligned to its specific needs. Yet the diversity of the competitive landscape means that telcos must make important strategic decisions early on in the selection process about, for example, whether or not they intend to expand their BI and analytics deployment enterprise-wide and how much customization they will require. A few vendors, such as IBM and Oracle, have pulled ahead of the pack due to their innovative product development strategies, but Ovum anticipates that this will continue to be an exceptionally competitive market.

APPENDIX

Author

Shagun Bali, Analyst, Telecoms IT

shagun.bali@ovum.com

Further reading

Ovum Decision Matrix: Business Intelligence and Analytics for Telcos, IT012-000068 (January 2013)

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