It Strategy-Movius

INTRODUCTION

About Movius

Movius interactive corporation is a leader in messaging, collaboration and mobile media solutions for service providers and enterprise customers globally. Movius solutions include a full suite of value-added services that includes messaging platform as well as different applications for messaging and collaboration. Voice mail, video mail, unified messaging, SMS, MMS, conferencing and video conferencing are some of their key offerings along with Mobile IM. The company has about 600 staffs across the globe with the biggest staff strength of 300 in India. Originally named IPUNITY Inc, the company started its operations in 1999 and developed one of the voice mail server systems and media servers. It then slowly moved to developing unified messaging and conferencing platforms and applications and sold them along with their own application servers and media servers mainly focussing on the VOIP customers. Their brand was called Mereon. In 2006, they merged with a company called Glenayre. The company was renamed IPUNITY-GLENAYRE Inc. With the merger they also acquired the ICE brand from Glenayre which also provides VAS services on the PSTN side. On January 2008, IPUNITY-GLENAYRE was renamed MOVIUS interactive corporation. Both the Mereon and ICE brand are trademarks belonging to Movius, a provider of Value-Added-Services to telecom operators and enterprises.

About the Value-added-service (VAS) industry

With the increased commoditization of voice and with gradual reducing costs, the call rates all over the world have dropped. Although the subscriber database is increasing 2 to 3 times each year, the thin line profit margins from voice have forced operators to think something beyond voice. This is where the value added services have stepped in. They added respite to the telecom operators by increasing their ARPU. Currently VAS contributes to about 10 per cent to any telecom firms' revenue. VAS includes all sorts of services from caller ring back tone to providing voice/video mail services, messaging services and data collaboration. The latest trends in the VAS offerings are location-based services and mobile IM. The mobile VAS market in India is estimated to reach Rs. 5500-6000 crore in 2007/08 growing at about 40% every year. However the number of users using VAS is less (around 2-3%) as the prices of value-added services are still on the higher side. Hence the industry players have to relook into their cost structure so that they can offer these services to the customers at a much lower price.

Currently there are more than 150 companies who sell valued added services software and hardware to operators and enterprises. Comverse is at No. 1 with 46% market share. Movius is at number 4 with around 10% market share.

COMPETITIVE STRATEGY

Technology seems to be defining and redefining business, creating and destroying value very rapidly. In the VAS industry, more and more offerings are coming up from different players at a lesser cost. Since the system integrators and the network operators expect quality offerings at reduced cost, there are constant efforts on how cost reduction could be affected. Hence to remain competitive, differentiating one’s product from the competitor is an important strategy. It is the cost, the quality of product and the features offered becomes the key differentiator between products.

In the VAS industry, the service providers cannot reach the end-customers. They have to maintain relationships with the different mobile network operators or system integrators. Hence a competitive strategy will be on how to develop better relationships with network operators and thus build up their brand image. Movius have to make sure that the Mereon and ICE brands are always in the top of the customer’s minds. The bargaining powers of customers are quite high as there are many players which cater to their needs. The number of new entrants is also increasing as the VAS is one area in telecom which is helping operators to increase their ARPU.

As the wireless technology moves towards 3G, video will be the next “big thing”. It is imperative for the VAS solution providers not only to support their offerings over 3G network but also offer new services that will cater exclusively to 3G customers. To remain competitive in the 3G market, Movius has developed features and have showcased them to customers who support 3G. The new entrants are trying to tap into the upcoming 3G space.

Movius has outsourced the manufacture of its carrier-grade media server equipment to Procsys. They also purchases Sun Netra servers, Dell servers, NetApp storage devices etc for their product offerings. Movius also needs to maintain a good vendor and supplier relationship so