INVENTORY MANAGEMENT RACE BETWEEN CRAMER, TELCORDIA

It is difficult to determine a true market leader in a segment filled with private companies, but a recent report by Stratecast Partners indicates that the Tier 1 inventory management space has come down to a two-horse race between Cramer Systems and Telcordia Technologies.

Telcordia maintains a solid lead in overall market share with 41% to Cramer's 23%, according to the report, with MetaSolv and NetCracker in double digits at 13% and 10%, respectively. However, the report provided U.K.-based Cramer with some long-sought validation for its product and its thought leadership.

Cramer, which recently expanded its U.S. operations with a new U.S. headquarters in MetaSolv's hometown of Plano, Texas, surpassed Telcordia as the leader in software license revenue for inventory solutions and was ranked as the preferred inventory management provider by leading system integrators.

“We have had a sense from a number of perspectives that we are achieving a new level of critical mass in the marketplace,” said Jon Craton, co-founder and CEO of Cramer. “This acknowledges that Cramer is getting above the noise and pulling ahead of the crowd.”

That crowd includes companies such as Incatel, Viziqor, Axiom and Syndesis. However, Cramer is focused on Telcordia as its primary competition and is crowing loudly about eclipsing it in licensed revenue for inventory software. Of Cramer's $70 million in fiscal 2004 revenue, $45.5 million was from licensed software. Telcordia had $39 million in licensed revenue and another $91 million from services, according to the report.

But is Cramer crowing too loudly? Lorien Pratt, program manager of OSS competitive strategies for Stratecast Partners, said no. “They have a more coherent road map and articulately described strategy for supporting horizontal integration of inventory systems, so I think they are as strong as they think they are,” she said.

But Pratt doesn't buy into Cramer's strategy 100%, especially its view that inventory management is the center of the OSS universe and that all OSS integration should start with inventory. However, she gave it credit for thought leadership and a superior reputation among system integrators.

“I got the sense [from system integrators] that they had respect for the current Cramer code base as well as Cramer's ability to plan where inventory management should go in the future,” Pratt said.

Despite Cramer's momentum, its licensed revenue leadership won't be easy to maintain. “[The race] will be neck and neck all year,” Pratt said.

Telcordia's Michael Anderson, vice president of new generation systems, thinks the Tier 1 inventory market is more of a one-and-a-half horse race. Telcordia acquired inventory leader Granite Systems in May of last year. The idea that it lost momentum since then or from Telcordia's subsequent acquisition by Providence Equity Partners and Warburg Pincus is not accurate, he said.

“In terms of the goals we set, we have outdone ourselves,” Anderson said. And contrary to a comment made by Craton — that he had it on good authority that Telcordia's Granite group secured no contract wins in 2004 — Anderson said Granite has won 14 contracts since September 2004 alone.

Pratt believes Telcordia did lose momentum but said it will be short term.

“The market was over[zealous] in its enthusiasm about losing Granite as a competitor,” Pratt said. “They may have underestimated Telcordia because of a short-term hiccup as part of the acquisition. They will still be formidable.

While Cramer and Telcordia battle for the top spot in licensed revenue, the more interesting dynamics will play out with MetaSolv and NetCracker, Pratt said. NetCracker, in particular is beginning to see genuine service provider deployments.

GLOBAL MARKET SHARE OF NETWORK INVENTORY MANAGEMENT VENDORS

Telcordia	41%
Cramer	23%
MetaSolv	13%
NetCracker	10%
Incatel	2%
Viziqor	2%
Axiom	1%
Syndesis	1%
Others	7%
Source: Stratecast Partners