2012 in Review: Winners and Losers

By: Tim Young - do not use (default)

December is upon us, which means 2012 is headed swiftly toward the exit, leaving industry commentators with the luxury as well as the duty of looking back across the communications trends that have shaped the year, with an eye out for potential growth areas in the year to come. This entire issue is filled with reflection and pontification on these developments, and I encourage you to have a look around. However, I wanted to take a moment to call out some of the overall tendencies that, in my mind, typified 2012, and to examine some of the winners and losers that emerged as these trends came and went.

With that in mind, here are some telecom trends that were at play this year, and some of the companies that gained or lost along the way.

Consolidation continues

There have been a number of noteworthy acquisitions in the communications IT (CommIT) space this year, creating the trend of a more highly consolidated CommIT sector.

NEC, along with subsidiary NetCracker, picked up the Convergys BSS business early in the year, adding those assets to its growing slate of CommIT solutions. Meanwhile, Ericsson has continued to play Pac-Man with OSS vendors, rounding out its Telcordia assets with the purchase of ConceptWave, an acquisition that pushes the number of worldwide customers served by Ericsson billing and charging solutions past the two-billion mark. Just recently, network and application management vendor Opnet (not to be confused with Openet) was picked up by network monitoring firm Riverbed for just under $1 billion.

The list goes on, and in all of these cases the small firms that managed to get picked up have benefited enormously from the process. Where would NetCracker be without its benefactor? Not buying up assets from Subex and Convergys, I don’t think.

Software wins

Where can we find the biggest winners in telecom over the past year? “I'd say the winner, in the largest sense, is IT,” says Nancee Ruzicka, director of OSS/BSS Global Competitive Strategies with Stratecast, a Frost & Sullivan company. “It's all about software — OSS/BSS, apps, analytics, software-controlled networks, servers, storage, databases.” Craig Clausen, executive vice president and principal analyst with New Paradigm Resources Group, a Chicago-based telecom research and consulting firm, concurs: “On the vendor side the softswitch guys — Metaswitch, in particular — have excelled this year in understanding that the future of telecom lies in ‘solutions’ and not ‘pipes.’”