For the second quarter ending March 31, 2005, income rose to $74.4m from $60.3m in the year-ago quarter, on revenue of $488.4m, up 10% and right on target based on Amdocs’ previously issued guidance.
Our strategy is to provide integrated customer management and in this quarter we had very good customer acceptance, said Alex Hawker, VP and GM of Amdocs Europe. Customers are saying we are moving in the right direction. When they need closer, more intimate and profitable relationships with their customers, ICM really starts to resonate.
During the quarter Amdocs secured a large software and services deal with communications service provider Elisa Corp of Finland that Hawker said was worth tens of millions of dollars.
Rather than taking the view that its market is shrinking, Hawker said he sees plenty of potential in the US, precisely because of the consolidation in the market. There is lots of potential in the US when you look at the size of what is being created via consolidation – consolidation is leading to huge operations, he said. Telcos have 50 million subscribers, two-and-a-half times British Telecom in the UK. They have complex billing environments and have to get a billing strategy and scalable [solutions] in place. We are well positioned to get a proportion of that opportunity.
As far as Amdocs is concerned, it is the combination of billing and CRM software combined with domain expertise and services that has fueled its two years of growth. Historically we were a billing company, then we added CRM, he said. It was catalyst for change in our market approach, the way we brought a product to market and the way we sell it. We added mediation software and order management and spent on the R&D to integrate, and on top of that added services to implement it.
There are similarities with Siebel Systems, which bought into the billing market with its edocs acquisition last year and is working to expand beyond pure CRM to the whole range of front-office products. In addition, Siebel is continuing to push its vertical focus, and new CEO George Shaheen appears to be positioning the company as a solutions provider offering both software and services. However, when you compare the two, Amdocs looks the stronger and more consistent.
Others in the market are predominantly software suppliers to the marketplace, they do not claim to be a system integrator to the market but Amdocs absolutely does. We are one of the few for whom software and services is a fundamental part of the strategy, said Hawker. Siebel has a professional services organization, but quarter over quarter it was being decreased under [Michael] Lawrie. It made a public statement that it was going back to its roots as a software supplier. It would help with services, but through a systems integrator. The new CEO has indicated that it needs to be more of a solutions provider and that services will play a more important part going forwards. That is interesting because you look at Amdocs and see it could be the way to success.
Amdocs and Siebel are similar in one other respect too. Each is sitting on a huge cash pile, and neither has indicated what it plans to do with it.
