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You will probably be aware of our views on Gartner’s yearly Integrated Revenue and Customer Management (IRCM) Magic Quadrant and one of our theses about how much actual influence it has on purchasing decisions (and therefore how badly you need to be in it – not that much, it turns out).
So, imagine our surprise when someone pointed out that the company has adopted a free, TripAdvisor type ‘filter’ for the service, called Peer Insights. Being a client of Gartner’s – as we know – is ‘reassuringly expensive’. Yet being a client of a client allows you to review vendor products and services, for free.
Although an astonishing turn up for the books, for some, it is also astonishingly sane. It smacks, almost, of common sense.
When you apply the filter of Peer Insights to the Magic Quadrant, strange things come to light. The Tier 1 vendors (rated on size rather than, say, innovative or disruptive technology) slip down the rankings. In fact, none of the Tier 1 vendors makes it to the top 5 IRCM vendors and only one squeaks into the top 10.
The winners, when this filter is applied, are the Tier 2 vendors. Not only do they rise to the top, but the number of their customers who are willing to post reviews on Peer Insights is also greater than the number who review the Tier 1s.
It seems there might be a shift going on, one that is causing problems for the behemoths of BSS. Transformation is now an urgent issue, and requires agility and responsiveness from vendors as well as responsiveness, at the least, from their clients.
Even relative newcomers to the space are after the Tier 1 operator crowd. As Dave Labuda, founder and CEO of MATRIXX Software told us last year, the reason is “that the [legacy] problem is far more evident at scale. It is not that the operator with two million subscribers does not have the problem but at that level there are still things you can do with the legacy. Once you get up to 20, 50, even 100 million subscribers and you are introducing 4G and so on, then at that level the legacy systems effectively just fall apart”.
Jon Ross, COO at Openet agrees and believes that in the current, sometimes chaotic environment, the Tier 1 vendors “come out and boast about winning a BSS deal valued at hundreds of millions, or in a very well publicised case upgrading an operator’s group BSS stack for $1bn with a five year deal. How can you deliver a 5 year BSS project? This industry doesn’t know where it’s going to be in 5 months, never mind 5 years”. So big is the shift that Ross believes that “BSS vendors will be screwed unless they start better serving operators”.
Dominic Smith, Marketing Director with Cerillion agrees too. “The tier 1s aren’t innovating, they’re not exciting customers, they’re not meeting today’s needs or demonstrating thought leadership”. Smith believes that this provides a unique advantage for the smaller player and believes that “vendors who own their R&D, harmonise their innovation with their existing products and tend, being the smaller challengers and visionaries, to care deeply about pleasing their customer base”.
It is true that we might well be seeing the age of the smaller vendor, even in the Tier 1 level of operator. It might be we are seeing, as in other arenas, the incumbents being properly challenged. It will probably be that incumbents will have to accept that to survive and thrive they will have to partner with agility to deliver meaningful digital transformation. The approach to legacy must change.
It is also true that with the filter provided by Peer Insights, the Gartner Magic Quadrant for IRCM becomes, in turn, much more meaningful.
Speaking as a ‘tier 2 vendor’ it’s very interesting. We (and I’m sure we’re not alone) constantly get challenged with the “well, you’re not tier 1” line when talking with large operators. But what is it that makes a vendor tier 1? Not customer happiness apparently.
It’s a really clear theme and we’re delighted that customer reviews are now public on the Peer Insights platform, revealing the views of operators actually using the software. From our view there’s a clear dividing line between those vendors with happy customers and those without and it’s not about being big, to us it looks to be far more about the quality of the product from the Tier 2s compared with the quality of solution from the Tier 1s; the majority of those Tier 1s implement loosely integrated modules gathered through acquisition that don’t deploy as a pre-integrated set; it’s not a product. It’s a lengthy, messy, bespoke project each time that inevitably leads to cost and time overruns.
What the reviews suggest to us is the endorsement of productised software that works.
Quality of the product undoubtedly has a lot to do with it. ‘Bigness’ is not irrelevant though. In my experience, other things being equal, when you deal with a tier two vendor, you’re dealing with a company whose strong focus is – because it has to be – on solution development, market awareness and customer satisfaction. When you deal with a tier one, you’re dealing with a corporation, a lot of whose energy is focused inwards. As a customer – unless you’re a behemoth yourself, with a similar gravitational pull – you’re unlikely to figure significantly in their universe. So you may get a decent product, but don’t expect the continuity of support, attention to detail and close personal relationship that adds up to a great customer experience (and a genuinely great technical solution for your business).