The challenges facing OSS supplier consolidation

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In my last article, “What would an OSS duopoly world look like?” I talked about the benefits and challenges of consolidation of the number of suppliers in the OSS market.

Today I’ll share an example of the types of challenge that can be faced. 

An existing OSS supplier (Company A) had developed a significant foot-hold in the T1 telco market around Asia. They had quite a wide range of products from their total suite installed at each of these customers.

Another OSS supplier (Company X) then acquired Company A. I wasn’t privy to the reasoning behind the purchase but I can surmise that it was a case of customer and revenue growth, primarily to up-sell Company X’s complementary products into Company A’s customers. There was a little bit of functionality overlap, but not a huge amount. In fact Company A’s functionality, if integrated into Company X’s product suite, would’ve given them significantly greater product reach.

To date, the acquisition hasn’t been a good one for Company X. They haven’t been able to up-sell to any of Customer A’s existing customers, probably because there are some significant challenges relating to the introduction of that product into Asia. Not only that, but Company A’s customers had been expecting greater support and new development under new management. When it didn’t arrive (there were no new revenues to facilitate Company X investing in it), those customers started to plan OSSreplacement projects.

I understand some integration efforts were investigated between Company A and Company X products, but it just wasn’t an easy fit.

As you can see, quite a few of the challenges of consolidation that were spoken about previously were all present in this single acquisition.

Maybe an operating system model could represent a path to overcome many of the challenges faced by the OSS industry. What if there were a Linux for OSS?

  • One where the drivers for any number of device types is already handled and we don’t have to worry about south-bound integrations anymore (mostly). When new devices come onto the market, they need to have agents designed to interact with the common, well-understood agents on the operating system
  • One where the user interface is generally defined and can be built upon by any number of other applications
  • One where data storage and handling is already pre-defined and additional utilities can be added to make data even easier to interact with
  • One where much of underlying technical complexity is already abstracted and the higher value functionality can be built on top

It seems to me to be a great starting point for solving many of the items listed as awaiting exponential improvement is this OSS Call for Innovation manifesto.

Interestingly, I can’t foresee any of today’s biggest OSS players developing such an operating system without a significant mindset shift. They have the resources to become the Microsoft / Apple / Google of the OSS market, but appear to be quite closed-door in their thinking. Waiting for disruption from elsewhere.

Let me relate this by example. TM Forum recently ran an event called DTA in Kuala Lumpur. It was an event for sharing ideas, conversations and letting the market know all about their products. All of the small to medium suppliers were happy to talk about their products, services and offerings. By contrast, I was ordered out of the rooms of one leading, but some might say struggling, vendor because I was only a walk-up. A walk-up representing a potential customer of them, but they didn’t even ask the question about how I might be of value to them (nor vice versa).

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