Apr 25, 2004
Comments Off on so why did we get together with boardtown?

so why did we get together with boardtown?

Last week we took a big step down a new road with the acquisition of Boardtown, company based in Starkville, Mississippi, whose primary products deal with billing, provisioning and customer care. You are most likely to have heard of their Platypus billing product.

The acquisition itself wasn’t that big relative to our size, but the direction it suggests certainly is. So I thought I would write a bit about why we have done this and why we think it is important.

Why billing?

It is a large problem for our customers. In the course of dealing with customer integration into the OpenSRS platform, and in having to deal with this problem for two service providers myself years ago, we have found that taking and keeping track of payments, provisioning services and managing customer care are significant challenges for service providers, for you guys.

Given the size of most service providers and the competitive nature of the services offered it is essential that these functions be automated and accurate. Problems with them lead directly to support costs and possible customer loss.

For years it has been common for service providers to have numerous customers receiving services without being billed. A quick personal example. My home DSL service, provided by Bell Canada, the largest telco in the country and owner of a multi-million dollar billing system, did not bill me at all from May-January of this year! Because of this they lost me as a customer.

Service Provider 2.0

All of this was problematic in the past, but we are at an inflection point in the competitive environment. Internet usage has reached a point in North America and Europe where growth in users has essentially peaked.

This means that the game has changed. Growth can no longer be expected to come from new customers. It now must come from selling more to existing customers. This is not news, but it may be the most important structural change for service providers for the next 5-10 years and the implications on operations are not yet digested.

The need to offer more services is most often constrained by current billing and provisioning systems. This has been our experience and is shared by others who provide services to service providers. Believe me, I have asked.

Current Market Environment

Today most service providers use inhouse billing solutions. These range in complexity from near-manual systems to relatively complex full-scale billing solutions. They either require much burping and feeding or constrain the ability of the service provider to offer additional services or both.

While sometimes life-threatening, many smaller service providers (here I would say 250-5000 customers) especially, have been able to avoid and ignore this problem. I do not believe this can continue.

At the high end the story isn’t much better. The offerings jump from Platypus and its competitors right up to Portal and others whose customers are rarely happy and who deliver much shelfware.

Besides they are too expensive by a couple of zeros for the vast majority of you guys and you are the ones who are winning competitively.

Why buy Boardtown/Platypus

Their experience allows us to enter this market better and faster. The company has been providing billing and provisioning software to service providers for nearly seven years. We are big believers in experience and subject matter expertise and believe that these people have demonstrated the highest level of knowledge about billing for service providers.

They have a strong reputation with their customers. It seems their customers like them as much as you guys like us and, maybe more importantly, they care as much about their customers as we do about you guys.

It was amazing that this was reinforced even after announcing the deal. I had a number of old Platypus users come out of the woodwork, current employees referencing previous jobs, bankers who had operated service providers years earlier. All of them had positive things to say. All of them had a story about customer service expectations being exceeded. We of all people know how hard it is to please you guys and have you say anything nice about suppliers.

Plus they are good guys. Oh and Mississippi is a bit warmer than Toronto in the winter!

We aren’t talking about product plans at this point, but you all know that I prefer service models to software models and I prefer subscription or monthly pricing to the classic software model of license and support.

We like to tie price to value wherever possible. It is how we like to buy so it should be how we like to sell.

All in, we are very excited about this. We think it can really enhance our ability to help you be better at what you do and to be more competitive. And if we do that than the rest takes care of itself.

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