NEC bolsters OSS capabilities by acquiring Convergys' IM business

NEC is adding another piece to its growing OSS puzzle by purchasing Convergys' (NYSE: CVG) Information Management (IM) business in a $449 million deal that includes all of IM's Smart Suite Products across different verticals including communications, utilities and logistics.

According to Convergys, the IM division reported revenues of $328.8 million, down 3 percent year-on-year, and operating income of $37.2 million, up 12 percent over 2010.

When the deal is complete by late second quarter of 2012, the IM business will be integrated into its NetCracker subsidiary.

By acquiring the IM unit, NEC/Netcracker will be able to offer its services to both enterprise and service provider customers BSS/OSS (Operational Support Systems) solutions through the cloud, as a managed service, or as an in-premise system.  

Shira Levine, directing analyst for Next Gen OSS and Policy at Infonetics Research, believes the acquisition enables it to capitalize on  the service provider's growing use of software systems. 

"I think it helps NEC better compete with NEPs such as Ericsson or Huawei, which are focusing on building out their software assets to help mitigate the declining margins on their equipment sales--it makes for a nice complement to the NetCracker assets, which are strong on the OSS side," she said.

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