SYNDESIS WINS TIER 1 CONTRACT

With service provider customers worldwide, Toronto-based Syndesis is far from a one-company provider, but this week the company announced a contract with one of North America's largest Tier 1 providers with committed plans for IPTV that nearly matches the revenue from its other contracts combined.

Coining its solution “converged service delivery management,” Syndesis will provide this carrier with operations support systems (OSSs) that manage the delivery of all broadband service offerings, including next-generation IPTV, data and voice.

The contract has a guaranteed value of approximately $40 million. The company claims it is one of the largest contracts ever awarded to an OSS software vendor. One analyst said it was at least in the top five OSS deals of the year.

“It puts the company in a whole new class and gets above the noise from other suppliers that have been working in the trenches,” said Mark Nicholson, chief technology officer for Syndesis.

It also puts the company on the line, as IPTV is to date an unproven technology. Syndesis has already answered questions about being able to scale to the needs of a Tier 1 network operator through separate deployments with this carrier and others. Syndesis also is working with Telus in Canada on its triple-play and IPTV implementations.

“The question is not whether Syndesis will be successful or not, but will IPTV itself be successful?” said Sanjay Mewada, vice president for the Yankee Group.

He said the complexity of the implementation, rather than scale, could be a challenge for Syndesis. “It's like riding the tail of a comet,” Mewada said. “You don't want to be stuck solving yesterday's problems. You want to be seen as the company that solves problems just around the corner. The flip side is, they will be dealing with technology where the carriers don't yet know how it will work.”

The new agreement builds on solutions Syndesis has been providing this carrier since 2002. Its NetProvision, NetDiscover and NetOptimizer components supported the carrier's ATM and Frame Relay services and were later extended to DSL, IP/virtual private network and voice-over-IP services.

Larry Goldman, founder and analyst at OSS Observer, was not surprised by Syndesis landing a Tier 1 provider for such a contract and said it was atypical of how smaller vendors sometimes win deals.

“They focused on what it took to win the business and built what the carrier wanted, but at the same time made it something that wasn't custom for one big customer, but something they could carry forward to other carriers,” Goldman said.

Nicholson said that besides its existing relationship, the secret to winning the new business was not to over commit.

“Whatever a supplier says they are going to do, that's what they need to do,” he said. “Sometimes it is less than required, but as long as you're honest about what you can deliver and you deliver it, that's important.”

Alcatel has several partnerships in this space with other vendors and is working with Syndesis in at least three other triple-play implementations. The companies don't have a formal agreement for IPTV, but Syndesis is part of Alcatel's Connected Partner Program.

Johanne Mayer, Alcatel's director of market positioning, as well as director of the board for the TeleManagement Forum, said that like any new technology, there will be some ironing out of issues with IPTV.

“A lot of things will be activated at the higher [services] layer, but the lower layers [where Syndesis works] will have to be pre-provisioned so when customers start installing their modems it all comes together,” Mayer said. “That's an important role.”

Although Syndesis' recent acquisition of CoManage played no role in winning its latest Tier 1 business, CoManage has a significant contract with BT, which announced last month it would roll out IPTV service in late summer of 2006.