New research predicts major first-mover advantage for service providers using virtual customer premise equipment (vCPE) solutions: up to $1.4 billion in new revenue and 79 percent order-to-cash cost reduction per site

ST. LOUIS - Oct. 13, 2015 - Amdocs (NASDAQ: DOX), the leading provider of customer experience solutions, today announced Amdocs Service Design and Create, a new network functions virtualization/software-defined networking (NFV/SDN) solution that allows service providers to achieve service agility by enabling the design, testing and launching of new network services in weeks rather than months2 and meet the expectations of today’s customers, influenced by the pace of over-the-top (OTT) providers’ service innovation.

Amdocs Service Design and Create overcomes the manual, time-consuming and resource-intensive service development process that today is a barrier to service innovation. With resource and service creation automation capabilities, the new solution shortens the service development lifecycle and reduces engineering and IT costs, automating the complete service development process – spanning service modeling, test and de-bugging, packaging and distribution – with an intuitive drag-and-drop interface and modular, reusable components.

Underscoring the strong market opportunity for agile software-powered networks, Amdocs also today announced new commissioned research from Analysys Mason that provides the industry’s first detailed analysis of the benefits that NFV/SDN can deliver for "first mover" service providers: up to $1.4 billion in new revenues, and a 79 percent improvement in order-to-cash (O2C) per-site per year for enterprise virtual customer premises equipment (vCPE) – a most promising NFV/SDN use case2.

"Our working hypothesis for this project was NFV and SDN are disruptive technologies that, if properly operationalized with OSS automation and self-service customer empowerment, will drive service agility and cost savings, which indeed the research proved," said Glen Ragoonanan of Analysys Mason and report co-author. "But interestingly, we found that vCPE-enabled services solution is a revolutionary opportunity for first-mover fixed-line service providers, provided they reach their critical mass ̶ 50 percent for residential and 40 percent for enterprise ̶ for vCPE customer migration.

The new research, drawing heavily on data from North American and European tier-1 service providers, investigates the key financial impacts of NFV in two areas which will be among its first commercial deployments: enterprise vCPE and residential set-top-box replacement (vSTB).

Key findings:

• Enterprise vCPE: service providers with first-mover advantage stand to realize up to a 5 percent annual revenue increase, resulting from increased revenues (of $1.4 billion over the investment period) from upsell/cross-selling of new and existing NFV/SDN services and a 79 percent O2C cost reduction per customer site, per year, due to OSS automation and customer self-provisioning.

• Residential vCPE/vSTB: service providers with first-mover advantage stand to realize up to 82 percent cost savings per home from the adoption of vCPE-enabled services, where high cost savings (up to $1.34 billion net cost savings over the investment period) can protect revenue margins from competitive price wars, as well as fund digital-home investments and generate new strategic residential revenue streams, and provide a $655 million increase in revenues from faster upsells of double-play to triple-play services.

"Service providers moving to NFV need to be aware that it’s not enough to simply deploy an NFV orchestrator to manage their hybrid physical and virtual network services," said Ann Hatchell, head of network marketing at Amdocs. "As this new research makes clear, to reap maximum benefit, they must also bring a new stream of services into the mix faster and at lower cost, which is exactly what this new solution helps to enable. Amdocs Service Design and Create enables agile OSS that moves our customers one step closer to The New World of Customer ExperienceTM, an era where service providers are expected to offer innovative and personalized services, brought to market quickly and delivered via agile software-powered networks."

Amdocs offers a comprehensive NFV portfolio including Amdocs Network Cloud Service Orchestrator (NCSO), an NFV orchestration solution, and a number of virtual network functions (VNFs).

¹ Analysys Mason white paper, "vCPE services business case: potentially billions of dollars payback for fixed CSPs" by Glen Ragoonanan and Gorkem Yigit, Analysys Mason; October 2015.

² Results from Amdocs internal testing. Commercial results may vary.