Amdocs Supports CRM With an Acquisition
Amdocs signed an agreement on Wednesday to acquire operations support systems (OSS) provider Cramer Systems Group for approximately $375 million in cash. The company plans to offer an expanded OSS suite that builds on Cramer's existing offerings, including its signature products in network resource management, activation, and auto discovery, combined with Amdocs' ability to handle large, complex projects. By acquiring Cramer, Amdocs has positioned itself in a way that one analyst calls a good short- and long-term strategy.
Guy Dubois, president and CEO of Cramer, will retain his existing management team, which will lead Cramer as a new division within Amdocs. Dubois said Amdocs and Cramer were "redefining the OSS industry" by joining. "Service providers are faced with the tripartite challenge of delivering more services at lower cost, managing network transformation and optimizing the customer experience," Dubois says.
Dov Baharav, Amdocs CEO, said the move into OSS gives the company an opportunity to seize on major growth opportunities. "Together we intend to deliver a complete, automated service fulfillment solution across all lines of business--for any service, on any network--linking order management at the customer layer with activation at the network layer."
"Amdocs has a good vision from end to end," says Martin Schneider, enterprise software analyst at The 451 Group. "Providing for CRM and building all the support--it makes sense and we agree with the strategy." Schneider expects the evolution of the market and of technology to necessitate further strategic moves, but believes the Cramer acquisition sets the stage for likely future endeavors. "With consolidation and all the things that continue to happen, they'll need to rethink their strategy, but they've got tons of time to do that," Schneider says.
Amdocs may face some potential landmines with this deal. "[The acquisition] will probably dilute Amdocs' stock for a little while, but in the long run it will probably be worth it," Schneider says. "It's significant in that it's a company that plays in that area and is as natural to the market as anyone else. But it does kind of continue to pigeonhole them as they look out on the horizon. How intelligent is it for them to tether themselves to an industry that could have another blowout? We're coming into an age where broadband infrastructure is where it's at for these guys to thrive again in the long haul."
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