Pipeline Q&A: Synchronoss

A Model for Business Process Outsourcing

With Stephen Waldis, President and CEO

Pipeline: Synchronoss is quite different from the typical vendor. Tell us about your company and your focus.

Waldis: Synchronoss is in its fifth year and our primary market is all Tier 1 service providers like Cingular, MCI and AT&T. We service three market segments – wireline, wireless and the cable MSO space. We provide automatic service fulfillment for our customers, primarily focused around the time when a customer wants to purchase a cell phone or Blackberry, or a voice, data or broadband circuit until that circuit is up and running and being billed properly. Ours is a ‘software as a service’ business model, which has gotten stronger every year. The differentiation we offer is in taking over the whole fulfillment function and giving our customers a fixed cost per transaction and a guaranteed service level for each transaction. We guarantee a fixed cost on a per transaction basis. That transaction has certain service levels associated with it that we guarantee to the customer. We can, for example, ensure a mobile phone activation, give the operator a guaranteed cost and timeframe, and stand behind the SLAs associated with that transaction. We’ve taken the risk out for the provider.

All of our service providers private label and push our services out to their customers. So, if you log onto an MCI site, it looks to you like MCI but it's actually our site. We service MCI's largest business customer, so when they order frame relay or an IP circuit, they go to our site to place that order. We also service consumers. If you go to AT&T Wireless or Cingular.com your order flows through to the Synchronoss platform. We do everything from the credit checking all the way through to activation. Again, that's private labeled – you're getting that provider's customer experience but it's our technology enabling it. Level 3 Communications, another Synchronoss client, provides a wholesale example. As they sell their VoIP services to AOL Time Warner, they use our technology for number porting order management.

We've built our ActivationNow® platform – a gateway and workflow management application that tracks every order from the time we receive it through test and turn-up. A lot of orders are not provisioned properly. We've focused on automating the workflow process so we know what status all [our customers'] orders are in and so they have visibility into that fulfillment world.

Pipeline: Explain a bit about how you tie your pricing to performance, and how you work savings that you create back into what you charge your customers.

Waldis: Part of our model is partnering with our customer and being able to give them guaranteed savings, efficiencies, and SLAs. It’s a classic ‘put your money where your mouth is’ scenario. We will take SLAs – shipped as ordered, provisioned as ordered, etc. With a cell phone order, if you go to a carrier website and place an order by 6 pm, you’ll have that phone the next business day and get the Fed Ex tracking so you can track that right to your doorstep. Our customers are getting assurances that our approach is to make the customer experience better, cheaper, and faster and we guarantee that to them.

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Pipeline: Who do you consider your major competition?

Waldis: We have several competitors with different models. First, we have to show that we have more efficiency than the service provider might build internally. I think we’ve had success in this, and that service providers view what we do as mission critical but not core to their business.

The second type of competitor is an SI that wants to offer off-the-shelf software, build it together and run it inside the customer.

Lastly, there are a lot of outsourcing shops today throwing bodies out there. They offer like for like for less, but more often based on the human element where they can get labor to do the same things at a better cost. These are the typical large outsourcers like IBM and EDS that might be managing parts of the network and want to move more upstream. This doesn't take our approach where we can also help automate the organization.

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