Why the back office is big business: in-depth analysis of five OSS sectors and side-by-side comparisons of 150 solutions

America's Network, Nov 1, 2003 by Shira Levine

During the telecom boom, operations support systems were not sexy. Fiber was sexy. IP technology was sexy. OSS was generally considered stodgy and dull, relegated to the far reaches of the show floor at Supercomm.

But just as the plain-Jane girl next door looks more appealing after you've been dumped by the prom queen, so OSS began to garner interest after the transport and hardware markets crashed. Faced with flat or declining revenues, carriers began to look for ways to cut costs from their operations, and savvy software vendors developed and marketed products that enabled them to do just that. Terms such as "inventory management" and "revenue assurance" have become industry buzzwords.

That's not to say that it's been smooth sailing for the OSS sector. Carriers have been in window-shopping mode for the last few years, evaluating OSS products but unwilling to make the investment quite yet. And many independent software vendors were unable to wait them out and were forced to shut down.

Yet there are OSS vendors who not only managed to hang on through the lean years, but are now well-positioned to acquire their smaller brethren and their assets. Companies such as CMS Communications, AMS and MetaSolv have expanded their product offering by buying assets from defunct OSS vendors and say they will continue on their buying spree as opportunities present themselves.

That strategy could pay off soon, as service providers begin to start loosening their purse strings. RHK predicts that the worldwide OSS market will increase from $31.2 billion in 2003 to $41.9 billion in 2006, an increase of 10%--with commercial, off-the-shelf products taking a larger share of total OSS expenditures. And consulting firm OSS Observer says that the OSS market is increasing 2% quarter-over-quarter, with particularly high contract activity in inventory management, revenue assurance and customer self-care in the wireline space, and performance management, service management and prepaid billing in the wireless arena.

For many service providers, however, the OSS market can be a confusing place, even with fewer vendors to choose from. Since most OSSs are, by their very nature, interrelated, it's often difficult to determine which functions any given system performs, and even more difficult to compare it, apples-to-apples, against other products. In our Complete OSS Buyer's Guide, we've done just that--boiled down the most essential information in five product categories and presented it for each vendor's solution. Three of these categories are in the pages that follow. The same three and an additional two categories are available only on our Web site (www.americasnetwork.com).

We offer the following lists of products with the caveat, however, that a bare listing of functionalities gives little indication of many crucial aspects of software performance, such as versatility and ease of integration with other OSSs.

Network management: No more single-vendor solutions

How do you handle network management in a world where few carriers have a single-vendor, single-technology network anymore? Mergers, new technology developments and network redundancy requirements mean that service providers today are looking for ways to monitor complex, multi-protocol, multi-vendor networks as simply and cost-efficiently as possible.

"It is obvious at this time that being locked into a single vendor solution is not the way that any carrier, even the largest, would want to invest in the future," says Bob Rosenberg, president of Insight Research.

In fact, Rosenberg believes that flexible network management systems are beginning to show up in RFPs for next-generation network buildouts. "It's interesting to watch the bids out there for fiber-to-the-curb or fiber-to-the-demarc-point," he says. "I'd bet dollars to doughnuts that when the vendors are selected and the dust clears, those vendors will have the ability to interrelate the management of both legacy systems and what is coming down the pike in the future."

The opportunities open to network management vendors who espouse this approach are significant. Insight predicts that the global market for broadband network management systems will be nearly $7.1 billion by the end of next year and $11.2 billion by 2008. Wireless network management presents another potentially lucrative opportunity, as mobile operators roll out data services and try to lure in more profitable business customers.

Network management is also a less crowded market space than it was a few years ago, as smaller independent software vendors shut down operations, leaving more space for larger companies and consolidators such as Telcordia, CMS Communications and Agilent. But Rosenburg believes that as demand for data services continues to grow, carriers will have no choice but to invest in systems to manage their data networks.

Billing: New models for the data world

Smart carriers have realized for some time that a bill is more than just an invoice mailed to the customer--it's a valuable customer retention tool. As the most direct link between the carrier and the customer, the bill can act as a sales and marketing tool, provide the customer with information about his services and, if it is delivered electronically, act as a portal into the carrier's Web site.