If you wore yellow glasses, would the sky look green? It might; ask Gartner.
Gartner just released its Magic Quadrant for what it now calls Integrated Revenue & Customer Management for CSPs and it is a puzzler. Gartner seems to be pretty uptight about reprints of its stuff, so I’m unfortunately not going to include the graphic here, but I have a copy in hand and will share some details with you. (If anyone has a link to the online source material, please let us know and I will add it to this post ASAP).
Here are my Top 5 Puzzlers on Gartner’s IRCM Magic Quadrant.
1) SAP is in the Leaders category.
Huh? My colleague, Alex Leslie, suggests that SAP might be earning points here for providing the billing behind iTunes, which he estimates bills about 400 million customers. That is impressive, but the Magic Quadrant is titled specifically as being “for CSPs”. iTunes isn’t one. What’s also odd is that Gartner’s methodology gives vendors credit for winning deals outside of telecom. And that makes sense when you’re evaluating the value and growth potential of a given company. But, again, the Magic Quadrant is titled as being for CSPs. So how do you get credit for deals won, or customers managed, outside of the CSP space on a CSP Magic Quadrant? In the CSP billing market, SAP isn’t really on anyone else’s top 10 list, so it’s tough to justify calling them a leader in the market.
2) NetCracker, Ericsson, AsiaInfo, and Redknee are all ranked as “Niche Players.”
Gartner’s 2011 evaluation criteria for niche players reads:
“…vendors in the Niche Players quadrant are situated there because of a geographical shortfall, narrow focus (they may provide only a limited subset of IRCM core and adjacent functionality) or lack of financial strength (that is, they have not achieved financial viability compared with the Leaders), or they have not come as far as the Leaders in advancing their technologies or functionality. This prevents them from being universally suitable to all customers.
Okay…explain to me again how NetCracker and Ericsson are narrowly focused, geographically limited, or lack financial viability? And AsiaInfo is perhaps the biggest biller in Asia with a strong reputation for technology and ability to execute. Redknee’s acqusition of Nokia Siemens’ billing business was not accounted for in this study because NSN is listed separately in the Challengers quadrant. Maybe we’ll give Gartner a pass on that one (since I’d like to think the good folks at Redknee won’t).
3) There’s no one in the Visionaries quadrant. So, again looking at the 2011 criteria, does that mean there’s no one who’s geographically limited that’s doing technologically impressive things in the IRCM space? You mean, companies like Cycle30 – who are strong on enterprise billing, offer a cloud-based solution, and are winning deals in and outside of telecom (which Gartner claims to love) doesn’t deserve a nod? How about Matrixx Software, who’s been breaking real-time processing records and demonstrating it at Swisscom…no? Sure, these examples probably don’t fit Gartner’s criteria for a variety of reasons – fair enough. But it seems that in an era where we see some impressive new technology coming to market in regards to real-time and cloud-based billing, someone would get an entry on the bottom right.
4) Huawei and CSG International are Challengers.
Let’s pull a quote from Gartner’s criteria again:
“Challengers perform well in their selected markets or industries. Although they have high capability and performance (in terms of sales and growth), they may not be targeting all segments or geographies of the IRCM market, or they may have a more limited vision of their functionality or technology. Clients with a conservative approach to business will find lower-risk options in this sector.”
Okay…so, which segment of the IRCM space and which part of the globe is the combined CSG-Intec team failing to go after? I get that CSG, as a brand, lacks a bit of global recognition – but Intec did not. That’s more of a post-acquisition branding transition issue than a market reality. And, I can see how CSG, with its roots in the US cable market, could be perceived as a safe bet, but not a sexy one. But on Gartner’s map, CSG barely qualifies as a Challenger and is an eyelash away from the Niche category. What’s also puzzling about this is that CSG, Redknee, NetCracker, and Ericsson are all clustered together, practically straddling the line between Challenger and Niche but also not far from the right side of the graph. So, this smacks of indecisiveness. It also suggests that if you grouped pre-NSN acquisition Redknee in a cluster with Ericsson, CSG, and NetCracker – arguably three of the Big 5 billers by many analysts’ measures – there’s something not quite right about your approach.
5) Oracle is squarely in the Leaders quadrant. Out of respect for colleagues at Oracle, I’ll go easy here, because this is meant to be a critique of Gartner’s map. But, if you know the space, you understand why this doesn’t make a heck of a lot of sense.
What’s right with Gartner’s graph?
Admittedly, this has been a bit snarky, so I want to point out a few things that seem right about the 2012 IRCM magic quadrant.
1) Amdocs is solidly in the Leaders quadrant. This is right. Kind of obvious, but no less correct.
2) Comverse ekes into the Leaders group. Yep – global, broadly installed, technically innovative, delivers a productized approach that jives with where operators seem to be going (i.e. away from heavy customization programs). But it may be argued that if Comverse belongs there, some of the other big guys we’ve discussed probably do as well.
3) Huawei is near the top of the Challenger’s pack. Huawei is kind of a newcomer among the big dogs in the space. Some of the experts I consulted for this article did not think it made sense to have Huawei solidly in the Challengers bloc, so there is debate around this. But there is some logic behind taking this company seriously as a player in the space without anointing it a Leader just yet. I’m not sure how this meshes with Gartner’s methodology, but the result seems to pass the smell test.
Why Should You Care?
Many people who buy billing and customer management systems for CSPs may include Gartner’s Magic Quadrants amongst the research they review when evaluating solutions and forming short lists for their RFPs. Unfortunately, most experts will agree that this Magic Quadrant (i.e. I’m not questioning Magic Quadrants in general, just this one) could be very misleading for CSPs or anyone else looking to evaluate the players in the billing and customer management universe. It is difficult to take this too seriously, much less as gospel, and likely should be viewed and reviewed with a more than few proverbial grains of salt. In this instance, I respectfully disagree with Gartner’s approach and opinions.
Se our Open Letter to Gartner here.
Even though this is last year’s post; I keep going back to it. I agree with Takis that you couldn’t have said it better. I am wondering though where I can get a good overview of where CSGI stands today? I admit to not knowing a lot about Intec and know CSG primarily as one of the cable billing guys in the US market.
You couldn’t have said it any better. The placement of some vendors in the Magic Quadrant makes me think twice about the validity and weight of the report. Having 20+ years of experience in the space, being with one of the top five SIs, and have first hand experience with almost every single vendor, I have a hard time seen Oracle in the leading Q as well as SAP. Again I disagree with the positioning of CSGI and Comverse. It seems to me that the criteria haven’t been applied consistently this year. I must say the 2011 report was way more consistent than the 2012.