Network mediation company Xacct is readying a suite of analytic applications for use with its usage information collection engines. Director of business development for EMEA Doug McCullen says operators want decision support and business intelligence tools to examine subscribers' activity as IP networks are built out.
Xacct won't say what the tools will comprise -- except greater statistical functions -- but it will move Xacct further up the value chain and bring it more closely into competition with the likes of Portal Software and Apogee in wireless, and Narus in the fixed-line market. We expect it will follow the analytics market and bring some prepackaged business intelligence to market plus reporting functions. It claims to have the software out at beta sites.
Context: Having started life in circuit-switched, fixed networks, Xacct has repositioned itself for wireless and IP networks. Its most significant wins to date have been with BT Manx Telecom's UMTS project on the Isle of Man and with Cable & Wireless. Xacct won't say how much revenue it's bringing in or from where, and the nature of the opportunity with C&W isn't clear following C&W's acquisition of Digital Island, which is a Narus customer.
Technology: Xacct says operators are currently turning their attention away from billing technologies per se and toward business intelligence. They want to see what subscribers are doing, when they are doing it and what they are using in order to develop more targeted products -- and more importantly from their point of view, tariffs.
As far as the wider 3G market opportunity is concerned, there's almost everything to play for. Xacct says operators are, for the most part, at the RFP stage -- it says it gets several a week.
Packet-switched networks give operators the opportunity not only of getting much better insight into what subscribers are doing (by the packet), but also of translating this into a one-to-one relationship by offering additional, personalized services based on previous activity.
Xacct's software collects network activity information and delivers it to applications such as rating engines, which then apply the tariff models to the data to feed into operators' billing processes. Xacct's unique selling point, the company claims, is its ability to do this at the client device or from the gateway. It works on wireline and wireless environments. The company says it already feeds CRM and fraud investigation systems, in addition to billing systems and ratings engines.
It says there's also an opportunity to integrate better with prepaid, post-pay and real-time billing systems.
Financial impact: Xacct says it doesn't compete with Narus in the wireless market. It more typically meets Portal and Apogee, plus what it calls the legacy ISVs such as Comptel and EHBT, which are offering operators versions of their 2G mediation software overlaid with GPRS enhancements.
Xacct most recently scooped up new deals with Motorola for its network equipment business and with Bell Canada. The two deals are said to be worth $35m in total over the next few years. It depends largely on what kind of success Motorola has with its network equipment and what kind of sell-through Xacct can achieve.
Israel-based Xacct has raised $82 million since 1997. It says it is now fully funded (but won't disclose break-even targets) and is still looking at an opportunity for selling shares on the public market.
Conclusion: Analytics is going to drive a new phase of growth in the business intelligence sector. Analyzing telephone subscribers' activity is exactly the kind of fine-grain examination of customer behavior that's going on across industries as companies seek to make better use of the data they have.
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