Optiva: journey towards public cloud€¦ · with the constant synchronization of Cloud Spanner database across zones/regions with the ability to scale up in seconds, instead of a

Optiva: journey towards public cloud

Optiva: journey towards

public cloud

John Abraham


Figure 1: Optiva company facts

2

Company summary

Optiva is a software provider of mission-critical, cloud-native,

monetization solutions for communication service providers

(CSPs) globally. The company, earlier known as Redknee, has in

the past acquired other assets, the most notable being the BSS

portfolio of NSN (2013) and Orga Systems (2015). Over the past

two years, the company underwent financial and organizational

restructuring as it raised additional funds to pare down debt and

also invest in next generation monetization systems and migrate

to the public cloud.

The company also rebranded as it shifted focus entirely to telco.

Optiva’s current portfolio of offerings includes multiple

monetization solutions that target different customer types. The

cloud-native charging engine is focused on tier-1 and leading tier-

2 CSPs while the end-to-end revenue management suite is

specifically focused on tier-2-4 CSPs and MVNOs.

The company is making significant investments in advancing its

portfolio to run natively on public cloud. Optiva has developed a

close working partnership with Google Cloud Platform (GCP), on

which the above mentioned two offerings are deployed. The

company is positioning itself as an enabler of low TCO

transformations and operations through a cloud-native portfolio.

This profile is focussed on Optiva’s journey in moving its

monetization solutions to run natively on the public cloud.

Founded 1999

OfficesHeadquartered in Toronto, Canada with personnel

worldwide.

Employees 500-600

Regional focus Worldwide

Revenue$121.6 million in the fiscal year ended September 30,

2018

Customers

Around 100 telecom customers, covering tier-1-2 with

Optiva Charging Engine or tier 2-4 with Optiva Revenue

Management Suite

Selected key

customers

KDDI, Vodafone, Claro Peru, Telus, Optus, BT/EE, Smart,

Vodacom Tanzania, DST, Cosmote

Partnerships Google Cloud Platform (GCP)

Public listing TSX: OPT (previously TSN: RKN)


Company summary: financials

Over the past two years, Optiva has undergone financial and

organisational restructuring with a new management on board.

The company’s revenues declined by 12% in 2018 to USD $121.6

million, although its losses have declined in the most recent

quarter. The company completed a rights offering in September

2017, collectively raising over USD $150m which was used to

pare down debt. The rights offering also funded Optiva’s

restructuring initiatives which helped it streamlines operations

and substantially eliminate fixed costs. As of December 2018, the

restructuring is nearly completed and the company is aiming to be

profitable by 2019.

The new team has refocussed the company on the public cloud by

offering next-generation cloud-native software solutions. The

company has invested in re-architecting its products to support

cloud-native capabilities on GCP. The company plans to continue

to its investments into R&D, which grew by over 46% YoY in 2018

to USD $61.5 million. In total, Optiva plans to invest USD $100

million to pivot its products and services to this strategy.

Optiva has made customer feedback (called customer success

index) a key KPI across the organization. Customers are surveyed

twice a year on their ability to achieve business objectives with

Optiva solutions. The company claims many customers who

previously had complaints about delivery and/or quality of

releases have reported improvements. The customer success

index has improved by 50% over 18 months and was at 33% as of

June 2018.

Figure 2: Optiva’s R&D investments 2016-2018

Figure 3: Optiva’s revenue by region, worldwide, 2018

3

31%

21%

48%

Asia and Pacific

Rim

North America,

Latin America and

Caribbeans

Europe, Middle

East and Africa

Total revenue:

USD121.6 million

Source: Analysys Mason

45.0 42.0

62.0

0

10

20

30

40

50

60

70

2016 2017 2018

Re

ven

ue

(U

SD

millio

n)

Source: Analysys Mason


Optiva’s two primary monetization solutions are cloud-native

compliant and can be deployed on GCP.

1. Optiva Charging Engine is a flexible end-to-end convergent

solution that is designed based on cloud-first principles. The

solution enables the monetization of emerging CSP use cases in

real-time with customizable charging, policy management and user

experience solutions. Optiva Charging Engine can be deployed

natively on GCP. The company selected GCP for the following

reasons:

• In internal testing, Google Cloud Spanner database offered 10x

performance at 1/10 of the cost over Oracle databases

• GCP’s private network that allows low latency interconnections

• Improved orchestration and faster time to market through Google

Kubernetes Engine (GKE)

• GCP’s robust security framework

• Competitive prices, compared to competition

2. Optiva Revenue Management suite is an end-to-end BSS solution

tailored for CSPs with up to 10M customers. Deployed on-prem or on

public cloud, it is designed to help CSPs consolidate multiple lines of

business on a single platform. The solution includes-

• Online charging, billing and payments support

• Integrated CRM, product catalog and order management

• Omni-channel customer care

Figure 4: Cloud-first design approach principles [Source:

Optiva, 2019]

4

Strategic direction – Optiva has adopted multiple monetisation solutions to support

a broader set of telco requirements

1 Adopt cloud-native architecture patterns

Decompose, refactor and replace legacy applications,

introduce cloud-first architectural patterns allowing

horizontal scalability and improved performance from the

same footprint

3 Improved scalability & operations

Adoption of Kubernetes/ Docker frameworks to reduce

deployment cost and bring elasticity to auto-scale, auto-

heal & performance monitoring, including zero

downtime in deployment and updates

2 Leverage industry standard

Use OSS tooling - databases, application/ integration/

management frameworks - in public and private cloud

deployments to reduce license and hardware costs

Optiva: journey towards public cloud 5

Optiva’s cloud journey overview

Optiva is investing around USD $100 million in adopting cloud-based technologies across its portfolio. The company’s cloud journey in

2018 highlights the focus and progress made. Core applications of OSS and/or BSS are decomposed and refactored to make it more

efficient for public cloud environments (GCP in this case). The current emphasis is mainly on the application layer while all other layers

(hardware, operating system, cluster consensus, cluster resources, orchestration and containers) are consumed from the cloud.

Becomes Google

Cloud Platform

(GCP) technology

partner

February

2018

onwards

Metered 1st

transaction on

Google Cloud

Platform

June

Optiva Charging

Engine generally

available on

kubernetes

June

Optiva Charging

Engine available on

GCP; promises 10x

processing

performance

July

Optiva Charging

Engine deployed on

the public cloud

September

Tier-1 telecom

service provider in

Australia launches

on GCP with Optiva

December

Tier-1 telco in APAC

initiates deployment of

Kubernetes enabled

Optiva Charging Engine

December

Figure 5: Optiva’s journey into cloud native architecture over the public cloud [Source: Optiva, 2019]

Truphone to deploy

Optiva’s Charging

Engine on GCP

February 19’

Optiva: journey towards public cloud 6

Optiva’s cloud evolution and deployment options

Figure 6: Optiva’s architectural evolution [Source: Optiva, 2019]

OLD OPTIVA ARCHITECTURE

Bare Metal Hardware

Hypervisor

Virtual machine

OS

App A

App B

Virtual machine

OS

App A

App B

Bare-Metal Virtualization

• Hypervisor installed on hardware

• Server virtualization &

consolidation

• Based on VMware and Microsoft

Hyper-V technologies

CURRENT OPTIVA ARCHITECTURE

Google cloud platform

Google Kubernetes Engine

Container

App C

Container

App D

Container

App A

Container

App B Container Technology

• OS with container support

• Infrastructure independence

• Based on Docker and Kubernetes

technologies

1. Kubernetes private cloud

On-premises or private cloud

deployment over Kubernetes,

using Oracle database, standby

disaster recovery and static test

bed. Although on-prem, using

Kubernetes with cloud enabled

version acts as a stepping stone

into the public cloud.

2. Hybrid with Disaster Recovery

on GCP

The production is managed on-

premise or on private cloud with

Kubernetes, disaster recovery is

deployed on the cloud. Main value

is to practice working on cloud, as

well as significant cost savings

through cloud DR.

3. Full public cloud deployment

The entire application is managed

on the public cloud, while high

availability and disaster recovery

is achieved through active-active

deployment model. Based on

availability requirements and use

cases required, Optiva can deploy

in single or multi-region formats.

DEPLOYMENT OPTIONS SUPPORTED BY OPTIVA


Optiva is positioning lowered TCO as a key differentiator of their

offering relative to other competitors. By deploying on GCP, Optiva

is promising a significantly faster performance at a substantially

lower cost. Both Optiva’s charging engine and revenue

management suite is cloud-native compliant currently.

Optiva offers its customers a consultative process upfront, where

a TCO model is specifically customized for the customer taking

into account return on investment (ROI) requirements. The on-

premise costs related to hardware, third party software systems,

OSS/BSS vendor fees, data center, personnel and support and

maintenance are considered. This is compared with the public-

cloud deployment option. Significant TCO savings is achieved by

lowered spending on infrastructure and operational support

resources. In addition, containerization and use of kubernetes

also allows for more efficient use of compute power through on-

demand scaling and flexible interoperability. This also helps lower

the overall TCO for cloud based deployments.

Additional cost savings is achieved by deploying disaster recovery

with the constant synchronization of Cloud Spanner database

across zones/regions with the ability to scale up in seconds,

instead of a passive replication of the entire production site.

Figure 7: TCO comparison over three years for a tier-2 operator in the

Middle East showing 60% reduced spending [Source: Optiva, 2019]

7

Optiva is claiming to lower TCO by 80% by deploying monetisation solutions in public

cloud

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Optiva on-prem Optiva on GCP

Optiva Fee

Personnel

Hardware and 3rd party Software - S&M

3rd party Software

Hardware

Data Center


Tier-1 operator in APAC region has deployed Optiva’s Kubernetes-enabled Charging

Engine solution

8

FOCUS OF THIS EFFORT PROJECT APPROACHSTATE OF THE BUSINESS

STRATEGY ANALYSISBUSINESS DRIVERS

Upgrade3

LoB

5X growth

2 months

1 Data-

center

50%

Of existing Optiva

charging engine

Prepaid,

Postpaid,

Fixed IN

Anticipated

growth of packet

core network

From kickoff to

acceptance tests

Out of

6 DCs

currently

TCO savings on

hardware

▪ Following a merger between 2 leading CSPs,

the newly created entity is leading in overall

market share by subscriber count.

▪ The merger has increased focus on

initiatives that will drive potential synergies,

including cost reducing through systems

consolidation and streamlining.

▪ The CSP is evaluating its journey to the

cloud (private and public) as part of its next

generation architecture strategy.

▪ The CSP is upgrading their monetization

solution to cloud-native Optiva charging

engine that is kubernetes and docker

enabled.

▪ The project is the first step into the public

cloud and is expected to help the customer

experiment with cloud based technologies

▪ The customer intends to track success by

measuring velocity, scaling and application

density.

▪ The elaborate systems architecture post

merger is driving to accelerate adoption of

cloud-based technologies to improve agility

and reduce cost.

▪ Apart from cost benefits, the project is

expected to drive greater experimentation

and exposure to cloud-native technologies.

▪ Depending on the outcome, the customer

considers migrating remaining 5 data

centres as well.

BENEFITSSeamless, swifter upgrades50% TCO saving on hardware Improved agility through dynamic, real-time

scalability

Largest CSP in

in its country

by subscribers

Hundreds of

millions of

customers

Revenue market

share

#1 Tier-1 32.2%


Truphone has deployed Optiva Charing Engine on public cloud

9

FOCUS OF THIS EFFORT PROJECT APPROACHSTATE OF THE BUSINESS

STRATEGY ANALYSISBUSINESS DRIVERS

Upgrade2

LoB

7X growth

6 months

3 on prem

sites

40-

60%

Of existing Optiva

charging engine

Consumer

and IOT

Anticipated

growth in IoT

devices

Duration of the

project

Production,

testing and DR

to move to GCP

TCO savings

from hardware

▪ UK based provider of global mobile voice

and data services through eSIM’s

▪ IOT business is projected to grow rapidly,

which demands seamless scalability and

high performance, while ensuring lowest

TCO

▪ An early partner of Apple to provide eSIM-

based connectivity for iPad

▪ Upgrading to Optiva Charing Engine,

deployed on GCP.

▪ Use of Cloud Spanner, to get low latency

and global consistent database

▪ Broader adoption of cloud to future-proof

operations and be prepared for growth

▪ The project will transform all legacy

infrastructure and reduce spending on local

data centres.

▪ The deployment will help create an always

available and inherently redundant setup

ensuring business continuity in all times

▪ The upgrade and migration to GCP will

result in significant cost savings.

BENEFITSProvide business continuity

and always on service40-60% TCO savings

Pay as you grow model,

optimizing up-front payments

Subscriber

count

Roaming

coverage via

partners

Incumbent

systems were due

an upgrade

100k 80 countries

Legacy

setup


Figure 8: Optiva’s products

10

Product summary

Product Analysys Mason

segment

Description

Optiva

Charging

Engine™

Monetisation

Platforms

Optiva’s Charging Engine is a cloud-native platform, designed with public-cloud principles and available on private and

public cloud. It can monetise any type of transaction that helps CSP transition seamlessly from traditional telco business to

digital CSP. When run on the public cloud, the solution runs most efficiently with Google Cloud Platform and horizontally

scales with Cloud Spanner to meet any potential traffic spikes. Optiva’s scalable solution enables operators to launch and

monetize their 4G and 5G networks and deliver advanced data services, including VoLTE, M2M, IoT, cloud services and

over-the-top offerings.

Optiva

Revenue

Management

Suite™

Monetisation

Platforms

Optiva Revenue Management Suite provides a private or public cloud-based end-to-end converged billing solution for tier-2,

3 and 4 CSPs, Mobile Network Operators (“MNOs”), Mobile Virtual Network Enablers (“MVNEs”), and Mobile Virtual Network

Operators (“MVNOs”). The solution offers fast and flexible modeling of any commercial offering and supports omni-channel

and any-play sales strategies by offering client products and services across multiple lines of business.

Optiva Policy

Management™

Monetisation

Platforms

Optiva Policy Management solution provides a single solution that enables service providers to take control of network

resource usage, assures quality of experience for users, and offers personalized services and differentiated, service-

specific charging. Optiva Policy Management solution is key to supporting operator data monetization strategies for real-

time applications, such as video streaming, interactive gaming and VoLTE.

Optiva

Wholesale

Billing™

Monetisation

Platforms

Optiva Wholesale Billing is a cloud-based solution that provides operators with greater visibility into network transactions

to achieve converged settlement and accurate interconnect billing. Optiva’s solution helps service providers maximize the

value of their network with a comprehensive and cost-effective interconnect, wholesale, roaming, MVNO, franchise

management and content settlement software solution.

Optiva E-

Payments™

Monetisation

Platforms

Optiva E-payment solutions broadens service providers abilities to monetize services with the provision of different

payment methods, including voucher and voucher-less payment and top-up solutions.


Figure 9: Optiva’s selected customers

11

Sample customers

Customer Country Scope

Vodafone-Idea India Real-time unified charging of data services that covers 200m+ prepaid , postpaid and fixed customers.

KDDI Japan Real- time converged charging, rating and invoice system with policy control.

Optus Australia Billing and settlement solution for wholesale segment.

AWCC Afghanistan Real- time converged charging, rating, invoice and payments system with policy control.

Sabafon Yemen Real- time converged charging, rating and invoice system.

Omantel Oman Real- time converged charging, rating and invoice system.

Vodacom South Africa Real- time converged charging, rating and invoice system with policy control.

Telus Canada End-to-end Optiva Revenue Management Suite, including provisioning, real-time rating invoicing, customer care, self care and

BI, for sub brand MVNOs.

Claro Peru Pre-integrated end-to-end BSS stack which includes provisioning, real-time rating and charging, billing and CRM to serve the

MVNO on its network.

Exito Colombia End-to-end Optiva Revenue Management Suite, including provisioning, real-time rating and charging, billing and CRM

Telcel Mexico Pre-integrated end-to-end BSS stack which includes provisioning, real-time rating and charging, billing and CRM to serve the

MVNO on its network.


OPPORTUNITIES

THREATS

STRENGTHS

WEAKNESSES

Analysis: strengths, weaknesses, opportunities and threats

12

▪ Increasing interest from telcos in embracing public cloud

architecture models and working with smaller vendors can be

beneficial to Optiva.

▪ Increasing CSP emphasis on value-based transformations with

low TCO is well aligned with Optiva’s positioning.

▪ Telcos are conservative when it comes to adoption of new

technology such as cloud and may choose to go slow in the

adoption of cloud based monetisation systems.

▪ Multiple vendors, from within and outside the telco industry are

working on cloud-hosted solutions which may impact Optiva’s

opportunities.

▪ A sizable number of existing customers across all tiers as a result

of past acquisitions and wins.

▪ Growing credentials and visibility as a cloud-native public-cloud

hosted provider of monetisation systems, thanks to its

partnership with Google.

▪ Optiva’s first public cloud based customer deployment is already

in live production.

▪ Extensive restructuring and rebranding has helped the company

reposition its portfolio and improve engagement with CSPs.

▪ Optiva’s lean sales footprint means the company’s visibility is

limited outside of its core regions.

▪ Optiva’s revenues have continued to decline which may impede

the company’s ability to engage with large tier-1 customers.


About the author

13

John Abraham (Principal Analyst) is a member of Analysys Mason's Telecoms Software and Networks Research team. He leads

our Monetisation Platforms programme and our research into digital experience for monetisation platforms, as part of the Digital

Experience programme. John also contributes to our research into cloud-native architecture models, which is covered as part of the Digital

Infrastructure Strategies programme. John has been part of the telecoms industry since 2006, and joined Analysys Mason in early 2012. He

has worked on a range of telco projects for operators in Africa, Europe, India and the Middle East. Before joining Analysys Mason, he worked for

several years for a BSS vendor and before that for Dell Inc in India. John holds a bachelor's degree in computer science from Anna University

(India) and an MBA from Bradford University School of Management (UK).


Research from Analysys Mason

14


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Optiva: journey towards public cloud€¦ · with the constant synchronization of Cloud Spanner database across zones/regions with the ability to scale up in seconds, instead of a

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