Ultimate Service Provision

In 2004 Flextronics, the massive electronics manufacturing suppliers, purchased Hughes Software Systems, established in 1991. In the same year, Flextronics also acquired frog design (capitalization their own), a creative consulting firm, and joined that to the Hughes operation.

Now, that software behemoth - both Hughes and frog -- has spun off again as an independent entity, newly renamed Aricent and with corporate offices in Palo Alto, as well as 24 other locations. . (The new name came from a company-wide contest. It's a combination of “arise” and “ascent.”) The new owners are Kohlberg Kravis Roberts & Co. and Sequoia, along with Flextronics, which retained 15% of the firm.

Aricent employs 6,700 consultants, designers and engineers and has created software that shows up in 40% of all communications and networking equipment in the world. So it makes sense that the focus of the new brand is “communications software.” These days that encompasses a lot of ground.

In other words, this is one big software company -- albeit behind the scenes. For the most part, you won't see the name on the products you use. But you'll recognize the stuff where Aricent's work shows up. Client segments include equipment manufacturers (Cisco, Nokia, Nortel and Lucent have tapped Aircent for software), device manufacturers (Motorola, Samsung, TI, NEC and Sony Ericsson fall into this camp) and service providers (such as Airtel, Direcway, Sprint, Virgin and Vodafone).

What fascinates me about this whole endeavor -- which I really didn't know much about, since it's not a set of markets I normally follow -- is the partnering aspects of Aricent's relationships with its clients. At its essence, Aricent has what every service provider in the outsourcing realm would love: total integration into the process, whatever that process might be.

The “Aricentian” who briefed me, Trevor Strudley, who's part of the marketing organization, said that although Aricent engineers and developers might jump into any phase of product development. "Sometimes we're advising [clients] on where trends are going and what can be achieved with the next things coming along. And other times we're just being responsive... 'Build us some software that runs on top of that.' We get paid for our services and expertise. Or they license technology from us, if we've already got something built. We take that and customize it for their environment."

In other words, Aricent is so smart about what it does, so populated with talented and knowledgeable people, its clients come to it for direction on what the Next Big Thing will be. Then the client hires Aricent to help build it.

That's the ultimate service provision. And that goes beyond the restrictions of the typical outsourcing engagement, where collaboration is usually more of pipedream than a reality.