AMDOCS COLLECTS CLARIFY FOR BARGAIN-BASEMENT PRICE

Amdocs validated much speculation last week when the billing and customer care developer waved $200 million in front of Nortel Networks and came away with the best assets of Clarify, a Nortel unit that makes customer relationship management systems.

Before handing over the goods, however, Nortel will reorganize the division as part of an overall restructuring and deliver what Amdocs President and CEO Avi Naor calls “a leaner and stronger Clarify team.” That likely means that most of Clarify's 1200 employees will be cut.

“The company went through some rough times in the last 18 months,” said Eli Gelman, senior vice president of sales for Amdocs. “You would expect more people to have pursued other opportunities, but a lot of these people are almost emotionally attached to the company.” Gelman singled out some key management, including the leaders of Clarify's R&D group, the global sales organization and professional services. The deal will boost Amdocs' profile and product offering in the increasingly important CRM market, according to a report on the acquisition by CIBC World Market.

To the CRM market in general, the deal is harder to quantify. “I wouldn't call it a wake-up call, but the other CRM vendors need to be thinking about what impact this will have on their organization,” said Scott Donahue, OSS program manager for Stratecast Partners. Clarify brings Amdocs about 200 telecom customers, including BT, Global Crossing and Level 3 Communications.

“These aren't just systems installed in some corner of one of the departments of the organization but in mission-critical mainstream call centers such as BT's,” Gelman said.

Some claim Nortel never capitalized on Clarify's potential. “Nortel had some significant reasons for purchasing Clarify, thinking they could make it pay off in a big way,” Donahue said. “But they really struggled — as a hardware company — to work out an OSS solution.”

Amdocs interviewed several Clarify customers to confirm the acceptance level of the company's offerings, Gelman said.

Amdocs will deal with some unhappy customers by leaving them behind. “For those who have not updated their maintenance agreement, we do not resume responsibility automatically,” Gelman said.

It also will keep Clarify's enterprise customers at arm's length by partnering with system integrators.

“We will retain our focus on telecom because we believe it is the strength of our company,” Gelman said.

Despite similarities between the software of Amdocs' and Clarify's software, the integration will be as much of a challenge as Amdoc's March 2000 acquisition of IP billing company Solect. “I don't think they have that integration down quite yet, and now they are biting off another large, ambitious project,” Donahue said.