TelcoDR’s Skyvera snaps up CloudSense

• Skyvera is the telecom software acquisition vehicle for TelcoDR
• It is building a portfolio of public cloud-ready next-generation digital support solutions
• Its latest acquisition is of CloudSense, a configure, price, quote and order management specialist 
• Appledore analyst believes the deal is the most strategic yet for TelcoDR as it dovetails with an important requirement for telcos addressing the enterprise services sector

Skyvera, the acquisition vehicle of public cloud-focused telecom software specialist TelcoDR, has added to its roster with the acquisition for an undisclosed sum of London, UK-based CloudSense, which has developed configure, price, quote (CPQ) and order management solutions for the digital service provider (DSP) sector, including telcos. 

The move is part of the ongoing efforts by TelcoDR, which is fronted by public-cloud evangelist Danielle Rios, to build a portfolio of digital support system (DSS) solutions that can support the needs of communications service providers and other DSPs in the media and other vertical sectors. Those efforts are backed by a long-term “Telco Transformation Fund” of $1bn (from unknown sources), which Rios is using strategically on acquisitions, the growth of AI-enabled software-as-a-service (SaaS) vendor Totogi, and other business development efforts. Skyvera has previously acquired American Virtual Cloud Technologies (including Kandy Communications) and telecom software systems from Indian vendor Sterlite Technologies Ltd (also known as STL). 

CloudSense fits neatly into the TelcoDR/Skyvera universe. The company, formed in 2009, developed its applications to run on Salesforce (which uses the public cloud) and counts the likes of BT Group, Liberty Global, O2 Telefónica (Telefónica Germany), Spotify, Telekom Austria, Telstra, Virgin Media O2 and Vodafone Ziggo among its customers. CloudSense, which has around 200 staff, has raised almost $95m in funding since its inception, according to investment tracking platform Tracxn, with the largest single round ($77m) coming from Vector Capital in 2017. It doesn’t publicly disclose its revenues.  

Its software “streamlines complex order processes, improves operational efficiency, and accelerates time-to-market through multi-channel integration,” noted Skyvera in this announcement about the deal, adding that it “plans to advance CloudSense’s platform by investing in AI-driven innovations.”

TelcoDR’s Rios said: “CloudSense’s platform complements our existing solutions, allowing us to better serve telecom operators by helping them streamline B2B sales processes, manage orders more effectively, and improve overall operational efficiency. CloudSense’s innovative approach to CPQ and order management will be further enhanced by AI, including the integration of Totogi’s BSS Magic services, enabling smarter decision-making and faster routes to revenue.”

Rios further expanded on the rationale behind the deal in this blog, in which she expands on why CPQ capabilities are important to telcos and how Skyvera will enhance the CloudSense solution with Totogi’s BSS Magic, a move that, according to Rios, will add telco-specific AI capabilities to the platform.     

She declined to specify how much Skyvera paid for CloudSense but noted the figure was “a crap-tonne less than [the $1.3bn] Salesforce paid for telco-specific CPQ competitor Vlocity” in 2020. “Being a ‘value buyer’ is part of our plan. There’s a huge amount of opportunity in CloudSense: The product is great, the roster of Tier-1 customers is impressive, and the focus on telco is right up our alley. But because we didn’t pay a huge multiple for the company, it’ll be easier for us to pay the investment back, allowing us to make the business case. It’s a smart move, and I love that for us,” noted Rios.

John Abraham, principal analyst at Appledore Research, also thinks this is a smart move. In comments emailed to TelecomTV, Abraham, who tracks the business support system (BSS)/digital enablement system (DES) sector closely, stated that this looks like TelcoDR’s “most strategic move to date. CPQ is a booming segment thanks to telco’s focus on unlocking the enterprise. Also, CloudSense has a decent portfolio – it was badly burned by the Salesforce acquisition of primary competitor Vlocity in 2020, which limited its opportunities through Salesforce. I would say CloudSense never quite recovered from that. It has been on the block for a while, looking for a saviour with substantial resources, and [TelcoDR/Skyvera/Totogi] fits that bill,” noted the analyst.

Abraham has also written a research note on the deal, in which he points out that traditional and/or generic CPQ systems were not designed to handle the complexity of current telco offerings for the enterprise sector, which often include multiple services and products, some of which come from third parties. He also notes that many telcos are planning to upgrade their CPQ systems in the near term, so the timing of this deal looks favourable. “If played right, this acquisition may prove to be Totogi’s most significant strategic move to date,” he concludes. 

- Ray Le Maistre, Editorial Director, TelecomTV