cVidya, the Israeli software vendors, have announced that Dr. Steffen Roehn will join their advisory board; see the press release here. Roehn was formerly the CIO of Deutsche Telekom Group, and before that he spent a decade serving as IT Director of T-Mobile Germany. He commented:

cVidya is poised for considerable growth…

…which should come as no surprise to anyone who has followed cVidya over the years. However, he did not elaborate on the factors that would drive growth.

The news that growth is expected fits with comments made by Frost & Sullivan last month, when they announced that Subex had the largest share of the ‘CSP financial assurance’ market. Their analysis concluded that Subex had 20.1% of the total market, compared to just 13.9% for the second-largest player. Frost & Sullivan said this about the market:

An important and growing market that was estimated at $470 million in 2012, CSP financial assurance is expected to expand at a compound annual growth rate (CAGR) of 12.8 percent to reach $765 million by 2016.

They also said that Subex was…

set to outpace competition and grow its market share further in the coming months.

However, the Frost & Sullivan award came just a few days after Subex’s results for Q3, which were well down year-on-year.

The big fall in Subex’s revenues, and the collapse of Connectiva, highlight that not all growth is good. In the past, I have highlighted some suspicious inconsistencies in cVidya’s reports about unbroken growth. Not all growth is sustainable, despite the implied simplicity of an analyst’s CAGR projections. Growth is easier to attain if you intend to grow losses rather than profits, but losses are not sustainable. Revenue assurance is not new, and companies like Subex and cVidya can no longer think of themselves as startups. Subex is a publicly traded company. cVidya is competing with a publicly traded company and half of it – the pre-merger ECtel – used to be public. When it comes to analysing performance, focusing on growth is becoming tedious. Whether the forecasts come from a former exec or from a sector analyst, they need to evolve and say more about profitability. Otherwise, suspicious customers will walk away from suppliers who are definitely here today, but might not be there tomorrow. Business assurance is typically pitched as a way to improve the telco’s bottom line. Vendors like Subex and cVidya need to do the same, finding ways to improve their own bottom line, instead of concentrating all their attention on growing sales.

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