Amdocs Partners VodafoneZiggo, Ups The Ante In NFV Market

Amdocs (NASDAQ:DOX) recently entered into a NFV (Network Function Virtualization) partnership with Dutch communication and entertainment provider VodafoneZiggo.

Reportedly, Amdocs will provide NFV solution to help VodafoneZiggo’s enterprise customers design, deploy and monitor virtual cloud networks on-demand.

As part of the project, Amdocs will aid VodafoneZiggo’s strategy to drive network virtualization and service innovation across its infrastructure. The partnership will require VodafoneZiggo to move to a single virtual capability located in its NFV cloud data center, and reduce network total cost of ownership.

Amdocs will add a new network and service orchestration and automation layer by delivering its NFV Orchestrator and Generic Virtual Network Function Manager to automate every aspect of VodafoneZiggo’s service lifecycle management.

Notably, VodafoneZiggo is a key driver of digitization within the European Union with a large customer base in the Netherlands. This partnership is therefore expected to benefit Amdocs by increasing its reach to VodafoneZiggo’s wide network of enterprise customers.

NFV: A Key Growth Driver

Amdocs’ NFV area is witnessing positive developments, which is aiding the company’s growth.

In September 2019, Amdocs and Samsung (KS:005930) partnered to jointly deliver services including NFV solutions. This allowed Amdocs to combine its expertise in enterprise-grade ONAP with Samsung’s advanced 5G network solutions portfolio to help CSPs speed up the development of new services.

Moreover, last year, Amdocs signed a deal with Comcast (NASDAQ:CMCSA) on the latter’s SD-WAN offering, which leveraged the leading energy portfolio of the former, bringing orchestration, fulfilment and automation capabilities to service providers.

In an effort to strengthen its presence in the 5G and NFV spaces, Amdocs also announced the acquisition of TTS Wireless in August this year to strengthen capabilities in open cloud and 5G network.

Per a Technology Business Research report, investments in telecom service provider NFV and software defined networking are expected to exceed $168 billion by 2022.

The number of global service providers, which are evaluating NFV, are also on the rise. Amdocs’ constant efforts to enhance capabilities in this front are likely to help it cash in on this opportunity.

Notably, in the last reported quarter, strong growth in Amdocs’ managed services business was driven by the continued ramp-up of managed transformation activities for customers like PLDT (NYSE:PHI) and Infineon (OTC:IFNNY) . It is combining the deployment of large-scale data transformation projects with operational benefits of its managed services model.

Rising Competition: A Concern

Companies operating in the NFV market are following product development strategies to meet the need of customers.

Some of the key players competing with Amdocs in the NFV market are Huawei, Broadcom (NASDAQ:AVGO), Ericsson (BS:ERICAs), Juniper, AT&T (NYSE:T), Nokia (HE:NOKIA) and F5 Networks (NASDAQ:FFIV).

For instance, AT&T is on track to virtualize 75% of its core network operations by 2020, leveraging the ONAP.

Moreover, in February this year, F5 Networks added carrier-grade network address translation as a stand-alone package to its NFV portfolio.

Nonetheless, Amdocs’ constant efforts to enhance capabilities in this front are expected to help it strengthen foothold in the NFV market.

The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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