nec strengthens global software business to support ...netcracker's oss product and si...
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NEC Strengthens Global Software Business to
Support Communications Service Providers~Acquisition of NetCracker~
June 27, 2008NEC
President Kaoru Yano
© NEC Corporation 20082
Agenda
1.Growth strategy and the aim of acquisition
2.NetCracker's profile and its position
3.Business strategy after the acquisition
© NEC Corporation 20083
1.Growth strategy and the aim of acquisition
© NEC Corporation 20084
Market and Competition Overview
While the Japanese market has matured, global market is expanding rapidly
Global market are following the lead of the Japan in NGN/Wireless Broadband
Commoditization of hardware and price pressure continue to impact the hardware market
NEC's Growth Strategy"Expansion into global business"
"Enlargement of non-hard business"
Japan Overseas
Hardware
SoftwareService
Current Business Area
Mid-term focusBusiness Area
© NEC Corporation 20085
Overseas
Software Products/Services
Portfolio and Business Strategy
ManagementSystems
ServiceApplications
Service PF
NW Infrastructure(Mobile/Broadband
equipment)
"Leverage the know-how and expertise gained from the NGN" "Position NEC for growth in the "Management Systems" market"
Japan
Today's AnnouncementStrategic Acquisition
of U.S. Software Vendor(NetCracker)
Mid to Long Term Growth Directions
Hardware
© NEC Corporation 20086
IP Network
Importance of Management SystemsM
obile
Net
wor
k
Inte
rnet
Service variety over the integrated networks make "Management Systems," especially "Operation Support Systems" a critical requirement
NGNManagement System
Fixe
dN
etw
ork
VideoDataTelephone CellPhone
VideoDataTelephone CellPhone
MngmtSystem
PastMngmtSystem
MngmtSystem
MngmtSystem
OSS
Fulfillment
Assurance
Billing
BSS
BSS: Business Support SystemOSS: Operation Support System
• Quick installation of new services
• Improvement of business efficiency
Various combination of services and tariffs
Necessity of improvement
© NEC Corporation 20087
OSS market forecasted at +6~7% (CAGR) growth owing to investment of NGN related new service OSS represents a 20% of overseas communications market (US$150B*)
Operation Support System (OSS) Market Forecast
Source: “Gartner Forecast:Operations Support Systems, Worldwide,2000-2011” Maritina Kurth, June 18, 2007: GJ08295.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2007 2008 2009 2010 2011
(Mill
ions
of
US
D)
APAC / Japan N. America S. AmericaW. Europe E. Europe Mid.East / Africa
6.8%CAGR (07-11E):
OSS Market by Region
* NEC estimate (FY2011)
APAC/Japan
NorthAmerica
WesternEurope
© NEC Corporation 20088
2. NetCracker's profile and its position
© NEC Corporation 20089
NetCracker's Profile Corporate Overview
Company name: NetCracker Technology CorporationEstablishment: October 1993Business area: Providing OSS software and servicesHeadquarters: Waltham, Massachusetts, USACEO: Mr. Andrew FeinbergNumbers of Employees: Approximately 1,000
StrengthCore focus is the high growth "Fulfillment and Provisioning" solutionUnique and strong technical capabilities in software and system integration including "Web base automatic fulfillment tool" with close interaction to support customersGlobal customer base including communications service providers in the US and Europe
© NEC Corporation 200810
Positioning of NetCracker
NGN
IElement & Service Management
IT Service
Network Service
FMobile Application
AMultimedia Application
DBilling, Call Center
EBilling
Telephone networkGDomestic SI
HInventory
BNetwork Management, BillingLegacy
Network
CElement Management, Provisioning
"Positioning of similar players with representative products"Provision of business assistance information
Managing the Condition of Network Elements
NetCracker corresponds to "Service Layer" and "NGN" combined growing business area
Adaptability to New Network Migration
HighIntelligence
NetCrackerFulfillment
© NEC Corporation 200811
NetCracker's Business Performance and its footprint
Customers include major carrier mainly in North America and European
SprintTELUS
Time Warner TelecomCOVAD
FranceTelecom/OrangeUPC
SwisscomMTS
Comstar
TelstraTNZ
Oceania Market
Rapid Growth in OSS
M$ Sales
2006 2007 20080
40
80
120
160
(planned)
Europe/Russian Market
North America Market
© NEC Corporation 200812
3.Business strategy after the acquisition
© NEC Corporation 200813
Operation after the AcquisitionWholly-owned subsidiaryContinue current structure (Management & Employees)
Continuous use of the brand
Management
Development・SI
Sales
Board member
NetCracker's MarketNEC's Market
Management
Development・SI
Sales
NEC NetCracker
Structure after the Acquisition
Collaboration
ManagementNEC board representation
Development & SIContinue NetCracker product developmentJoint development plans
SalesUtilize both NetCracker/NECsales channels(Japan & Oversea)
Collaboration
© NEC Corporation 200814
Synergies as a Result of the AcquisitionEnd to End NGN service solutions by incorporating
NetCracker products and SI capabilities in NEC businessOperation Support System is a gateway to IT
Operations Support
NEC
Service Platform(SDP)
ElectronicSettlements
Network Platform(NW Infrastructure)
SaaS
IPTV
・・・・
End UsersTerminals
IT/NW Infrastructure
Information/Communication /Broadcasting services
NetCracker
Synergies
Service Intro.Support
Service QualityManagement
BillingManagement
Business Support
Synergies
© NEC Corporation 200815
Expansion of IT and Network SolutionsExpand IT and Network solutions through the integration of NetCracker's OSS product and SI capabilities with that of NEC's full-layer technological strengths
Global Expansion
NW
Integration
IT
Japanese Market Global Market
Network Infrastructure
Service Platform
OSS
Network Service
IT Service
Starting from product level,
and expanding to IT/Network solution through synergy
NetCrackerNetCracker
© NEC Corporation 200816
0
1000
2000
3000
2008 2009 2010 2011 2012年 度
売上
高(億
円)
新規
既存
Business Goals
Aiming to attain leading position in global IT/Network business
Aiming to attain leading position in global IT/Network business
Expect 200 billion yen business as a
result of acquisition
Sales of Management System Business
New
Old
Sales(100 mil yen)
Fiscal Year
© NEC Corporation 200817
Attachment
© NEC Corporation 200818
NetCracker's strength in fulfillment and OSS
Highly versatile products in the fulfillment area
SI service capabilities backed by skillful engineers ⇒Client-based business
NetCracker's OSS Business
Expanding OSS business centered on fulfillment
Fulfillment(Service Support)
Assurance(Service/Quality Management)
Billing(Rating & Charging)
+
System manages and operates service
set-up and order receipt
System managesservice content
quality, customer requirements and claims
System manages confirmation of
content use, billing and charges
© NEC Corporation 200819
About OSS
OSS (Operations Support System) is an essential system for CSP to streamline networks, service resources and provide communications services.Systems become increasingly important as service diversification and IP implementation progress.
OSS: Operations Support System
OSS: Operations Support System
Design, Allocate, Activate, Deliver
Rating &Charging
Order entry Bill ClaimService/Quality
Management
Customer Relations
Fulfillment Assurance Billing
Network Interface
Network fault &
Performance
Usage time/data volume
Mobile Wireless LANBroadband
NetworkNetwork
End UserEnd User
Transport Access
Service
© NEC Corporation 200820
About Fulfillment