Portfolio Assessments: Beauty Is in the Eye of the Beholder

David Snow
David Snow

At Current Analysis, we like to say we’re “different than other analyst firms” in that we don’t focus our analysis on producing market forecasts.  Of course, this approach often raises the question from those who are not familiar with us: “So, if you don’t do numbers, what do you do?”  The snarky answer is “lots of stuff.”  However, one of the more popular aspects of our analysis are our Product Assessments.  Now, we don’t tear down platforms, but we do perform metrics-driven SWOT analysis on a range of vendor offerings.   Here’s a little more about how we approach the task.

When it comes to assessing a vendor’s products or portfolios, the saying “beauty in is the eye of the beholder” certainly rings true.  Current Analysis’ SPI (Service Provider Infrastructure) clients are mostly carriers and equipment vendors, so, for a start, you have at least two “beholder” groups to consider.  Then, within each beholder group you have a different mix of roles; think strategy vs. marketing or marketing vs. procurement.  Add in the fact that carriers are of different sizes (the infamous “tiers”) run different network types (fixed/mobile/converged) and occupy different footprints (global/regional/national) and the number of “beholders” and “beauty expectations” just keeps on multiplying.

This diversity was brought into sharp focus with our latest IMS Portfolio Assessments, where we rate companies against multiple selection/buying criteria and also come up with an overall portfolio rating.

It has to be said outright that we primarily address the carrier audience in our reports.  Not surprisingly, however, much of the reaction to our analysis centers on how vendors compare with one another.  Carriers, after all, want to know what’s available to them and vendors, as always, are intensely conscious of what carriers will be thinking when they look at their ratings.  These assessments are built by benchmarking product portfolios using multiple metrics and weightings, aggregating them into carrier selection/buying criteria and then evaluating the performance against these buying criteria to deliver a portfolio rating.  This portfolio rating, however, isn’t a universal recommendation to “buy or not buy.”

For example, in this round, NSN didn’t come out quite as strong overall as other companies in the group (for example, Huawei or Alcatel-Lucent), largely due to impact of the company’s strategic refocus into the mobile market.  Does that mean we wouldn’t recommend a carrier buying NSN’s IMS?  Certainly not; for that would depend much more on the individual carrier’s IMS “use case,” which will in all likelihood not align completely with the “generalized” carrier selection criteria and weightings we use to develop the ratings.  Not only that, there are many other selection/buying criteria that a carrier must consider, such as overall company capabilities and traction (we cover these in company assessments), regional success (see this blog post from Rick Talbot) and many others that emerge as different stakeholders weigh in during the procurement process.  These can all make a significant difference to the final result – and so they should, if the carrier is serious about due diligence.

Turning back to NSN again, to its credit you would be hard pressed to find an IMS portfolio more optimized for mobile networks.  Neither are you likely to find or a more powerful credibility reference than the company’s flagship deployment at Verizon Wireless.  Did we take that into account?  Yes, but we also gave other vendors credit for the number of IMS deals – fixed, mobile and converged – that they have successfully executed.  That serves to highlight just some of the difficulties inherent in portfolio analysis.  While people may want a single answer, a number they can point to which sums up a portfolio and tells you whether or not to buy a given product, that’s just not the world we live in and why we deliver – along with that overall rating – the detail needed to help make a tailored product decision.  So, it may not always be fun to look into that level of detail, but when millions of dollars of CapEx are at stake, it’s critical.  Is it portfolio breadth or depth; deal quantity or quality; product innovation or product experience?  As usual, it depends; we’d be the first to admit that portfolio analysis is far from perfect science and we put our heads on the block whenever we publish ratings, particularly the “overall” ones.  In the end, however, it’s the carrier use case alignment that really matters, and we believe that portfolio assessments are a great place for carriers to start on their journey towards realizing their “beautiful solution.”

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