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Operations
Support Systems (OSS)
2000-2005
a market research report
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Carriers around the globe need to invest in a new generation of back-office operations support systems (OSSes) that can create, deploy, manage, and maintain new packet-based services. New OSSes will enable carriers to meet faster time-to-market objectives, organize complex wholesale/retail relationships, and manage relationships with customers.
Competition has forced providers to focus on the customer, and OSSes today are all about easier and better customer contact. Traditional OSSes managed the network; new OSSes respond to and (in many cases) manage the service provider’s total relationship with the customer. For instance, when the customer contacts the provider to arrange for a new service, service activation can sometimes be done in hours, not in days. Moreover, the provider can use new customer relationship management (CRM) systems to recommend additional services to increase both revenue and customer satisfaction.
As telecom service providers invest heavily in new broadband packet-based networks and the systems to manage them, Insight predicts that global OSS sales revenue will top $33.8 billion
in 2000, growing to $59.9 billion
annually by 2005.
Operations Support Systems 2000-2005 forecasts global sales revenue for OSS software, hardware, maintenance, and professional
services, analyzing the major conditions and unique challenges in each segment. For equipment manufacturers, software vendors, and systems integration firms––anyone operating in the OSS space––this report is a must read, from a
highly regarded firm who has been studying OSS for over eight years. Insight segments OSS revenue by four global regions, carrier type, wireline vs.
wireless, broadband vs. narrowband, and eight OSS functional categories.
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Report Excerpt
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Background
Carriers worldwide are spending more than ever before
on infrastructure. Capital spending by US
telecommunications companies in 2000 is running at nearly
three times the rate of investment made by carriers in
1995, according to a recent report by Sanford C.
Bernstein. However, fierce competition continues to drive
the margins on traditional service offerings even lower,
and financial analysts are raising the question of just
how long the buying binge can be sustained. The situation
has forced the once-proud giant, AT&T, into a corner.
SBC and Verizon Communications have watched their
valuations plummet. And in Europe, BT and Deutsche
Telekom are faring no better.
In Insight Research's opinion, the stock devaluations
of the prominent carriers may be a premature overreaction
on the part of the financial community. The investments
required to sustain a transition from a narrowband
circuit-switched network to a broadband packetized
network have no historical precedents. Moreover, the
shift to a data-centric world where voice “rides
free” on the new packet-based networks implies a
tectonic shift in service provider business models.
Service providers are betting that the future belongs to
broadband—and global society shares that
expectation, if the popularity of the Internet and the
rapid growth of high-speed access lines are any
indication. Substantial investment needs to continue in
the short term if the transition to the broadband network
is to take place smoothly and quickly.
In addition to purchasing optical transport,
switching, and access equipment, carriers around the
globe need to invest in a new generation of back-office
operations support systems (OSSes) that can create,
deploy, manage, and maintain new packet-based services.
The very composition of these services are more often
than not defined in software, with products such as
softswitches making an almost unlimited spectrum of new
services available, such as “follow me
anywhere” calling, true unified messaging, and
multimedia conferencing. In the converged environment,
OSSes now develop concurrently with service offerings, as opposed to being an afterthought, as typically occurred
in the circuit-switched environment.
Our research suggests that the cost of operations may
be beginning to grow relative to the cost of network
infrastructure. In other words, OSSes will begin taking a
larger portion of service providers' budgets in the
future. This situation can be understood by considering
the cost of transport and switching relative to
operations. Moore's law (and its fiber optic corollary)
posit a decreasing cost of computer chips (and fiber
optic equipment) relative to performance. Hence,
transport costs per megabyte of data are falling rapidly. Switching costs are similarly decreasing, as a result of
both the aforementioned “laws” and the
migration to packet-switched architectures. Costs for OSS
software, on the other hand, will decrease much more
slowly while their importance to carriers actually
increases.
Customer-Focused OSSes
Competition has forced providers to focus on the
customer, and OSSes today are all about easier and better
customer contact. Traditional OSSes managed the network;
new OSSes respond to and (in many cases) manage the
service provider's total relationship with the customer:
- When the customer contacts the service provider
to arrange for a new service, service activation
can sometimes be done in hours, not in days.
Moreover, the service provider can use new
customer relationship management (CRM) systems to
recommend additional services to increase both
revenue and customer satisfaction.
- If access to the customer site is needed, an
appointment can be made within a specified hour
on a date convenient for the customer, not
“sometime between 8 AM and 5 PM” on a
date convenient to the service provider.
- Likewise, when a service provider's customer care
center contacts the customer, representatives can
identify customers who are likely to jump to
another provider or subscribe to additional
services.
New technologies also allow the flow-through of
customer requests without human intervention. Customers
have become accustomed to using interactive voice
response (IVR) units when contacting service providers,
and the millions of Internet users can now manage their
accounts online. Service orders or trouble tickets are
automatically handled based on interactions with the
customer and network elements. OSSes are making all of
this happen.
The Market
Segmenting the market into OSSes supporting narrowband
and broadband services is important because the current
broadband revenue stream is small, but explosive growth
is expected. Distinguishing between OSSes supporting
wireline and wireless services becomes particularly
useful when comparing the OSS market on a
region-by-region basis. The international marketplace is
playing catch-up to North America with respect to
wireline services and competition. In most countries,
long-standing rules hindering new companies from
providing services competitive with those of the dominant
carriers are being eliminated. In many instances,
state-owned monopolies are being privatized, further
reducing the government's interest in protecting the
dominant carrier. World trade agreements are also opening
these countries' telecommunications markets to
competition from outside its borders.
Therefore, the international market for OSS vendors
represents an important opportunity. In fact, OSS
spending growth in both the Asia/Pacific and Latin
America regions will exceed OSS spending growth in North
America. Both service providers and vendors should be
able to take advantage of the lessons learned in North
America, where competition and customer disloyalty have
become a fact of life in recent years. North America, on
the other hand, will take its lessons from the
international wireless market, where the more unified
approach to standards has permitted carriers to take the
initiative in defining and supporting new services.
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Market Segmentation
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- Application
- Billing
- Customer Care
- Planning & Engineering
- Provisioning & Inventory
- Trouble Repair
- Network Management
- Business Management
- Workforce Management
- Customer Segment
- Long Distance
- Local
- Cable MSO
- ISP
- Component
- Hardware
- Software
- Professional Services
- Maintenance
- Type of Service
- Narrowband
- Broadband
- Wireless
- Wireline
- Worldwide Market Segment Revenue
- Worldwide OSS Sales Revenue
- Region
- Distibution by Region
- Wireline vs. Wireless
- Service Type
- OSS Type
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 Background
1.2 Customer-Focused OSSes
1.3 The Market
CHAPTER II
DEFINITIONS AND OVERVIEW
2.1 OSS Defined
2.1.1 Applications
2.1.2 Middleware
2.1.3 Hardware
2.1.4 Professional Services
2.1.5 Definitions Summary
2.2 Worldwide Overview
2.2.1 United States: The Breakup of the Bell System
2.2.2 Rest of the World: Liberalizing the Telecom
Infrastructure
2.2.3 Worldwide Wireless: New Opportunities
2.2.4 The Importance of OSS Investment
2.3 Operations Support Applications
2.3.1 Business Operations Support
2.3.1.1 Customer Care
2.3.1.2 Service Orders
2.3.1.3 Billing Mediation
2.3.1.4 Rating
2.3.1.5 Billing
2.3.2 Network Operations Support
2.3.2.1 Engineering and Planning
2.3.2.2 Provisioning
2.3.2.3 Trouble/Repair
2.3.2.4 Network Management
2.4 OSS Market Structure: Demand Side View
2.4.1 By OSS Type
2.4.2 By Region
2.4.3 By Service Domain
2.4.4 By OSS Component
2.5 OSS Market Structure: Supply Side View
2.5.1 OSS Vendor Market History
2.5.2 Types of OSS Vendors
2.5.3 OSS Partnership Structures
CHAPTER III
MARKET TRENDS
3.1 Common OSS Trends
3.2 Domestic Trends
3.2.1 Local Services Competition
3.2.1.1 ILEC Resale and Network Unbundling
3.2.1.2 ILEC Bypass
3.2.2 Interconnection
3.2.2.1 Telecommunications Management Network Standards
3.2.3 Changes in Network and Service Management
3.3 International
3.4 Wireline Carrier Trends
3.5 Wireless Carrier Trends
3.5.1 The US Led but Now Follows
3.5.2 Wireless Growth Continues
3.5.3 Price Competition and New Services
3.5.4 Wireless Access Network Trends
3.5.5 Implications for Wireless OSSes
3.6 Satellite Trends
3.6.1 VSAT
3.6.2 DBS
3.6.3 LEO/MEO
3.6.4 GEO
3.7 Cable TV Trends
3.8 Major Technology Trends
3.8.1 Optical Transmission and Network Management
3.8.2 Object Orientation
3.8.3 Service Providers' Usage of the Internet
3.8.3.1 IP Telephony
3.8.3.2 IP VPNs
3.9 Emerging OSS Opportunities
CHAPTER IV
OSS CUSTOMER MARKETS
4.1 Customer Requirements
4.2 Domestic Wireline Market Needs
4.2.1 Implementing Local Number Portability
4.2.1.1 Enabling Competitive Local Services
4.2.1.2 Number Exhaustion in North America
4.2.2 Effective Electronic Bonding
4.2.3 Monitoring Network Quality
4.2.4 Outsourcing/Demand for ASP Services
4.2.5 Customer-Centric Market Differentiation
4.2.6 Unearthing New Revenue Sources
4.2.7 Changing Internet Access Strategies
4.2.8 Broadband Network Management
4.3 Domestic Wireless Market Needs 104
4.3.1 Coping with Wireless Carrier Convergence
4.3.2 Reducing Customer Churn Rates
4.3.3 Achieving Over-The-Air Service Activation
4.3.4 Maintaining Network Reliability and Quality
4.3.5 Meeting Wireless Number Portability FCC Mandate
4.3.6 Reducing Fraud Losses in Voice and Data
Environments
4.3.7 Collecting Revenues from Intercarrier Billing
4.4 International Wireline Market Needs
4.5 International Wireless Market Needs
4.6 Cable TV Service Provider Market Needs
4.7 Internet Service Provider Market Needs
4.7.1 Upgrading Network Equipment
4.7.2 Providing Network Security
4.7.3 Billing for Bundled Internet Services
4.7.4 Meeting Consumer Demand for Fast Internet Access
4.7.5 Offering Reliable VoIP and Real-time Interactive
Services
Chapter V
VENDORS
5.1 ADC Telecommunications, Inc.
5.2 Agilent Technologies Inc.
5.3 AI Metrix, Inc.
5.4 Alcatel (Newbridge Networks)
5.5 Applied Innovation Inc.
5.6 Cisco
5.7 Convergys
5.8 CrossKeys Systems Corporation
5.9 Computer Sciences Corporation
5.10 DST Innovis, Inc.
5.11 Electronic Data Systems Corporation
5.12 Granite Systems Research Corporation
5.13 Hekimian Laboratories, Inc.
5.14 Ericsson/Hewlett Packard Telecommunications
5.15 Hewlett-Packard Company
5.16 ISR Global Telecom, Inc.
5.17 Lucent Technologies, Inc.
5.17.1 Kenan Systems Corporation
5.18 Microsoft Corporation
5.19 Nortel Networks
5.20 Open Networks Engineering, Inc. (ONE)
5.21 OpenCon Systems, Inc.
5.22 Objective Systems Integrators, Inc.
5.23 PeopleSoft Inc.
5.24 Portal Software, Inc.
5.25 Sun Microsystems, Inc.
5.26 TCSI Corporation
5.27 Telcordia
5.28 Vertel Corporation
5.29 XACCT Technologies
5.30 Summary of Vendors
CHAPTER VI
MARKET FORECAST
6.1 Introduction
6.2 Methodology
6.2.1 Market Analysis Structure
6.2.2 OSS Application Categories
6.2.3 Addressable Market Methodology
6.2.4 Methodology Algorithm
6.2.5 Forecasting Model Enhancements
6.3 Global Forecasts
6.4 North America
6.4.1 Wireline
6.4.2 Wireless
6.4.3 Broadband
6.4.4 Professional Services
6.5 International
6.5.1 Wireline
6.5.2 Wireless
6.5.3 Broadband
6.5.4 Professional Services
6.6 Europe/Middle East
6.6.1 Wireline
6.6.2 Wireless
6.6.3 Broadband
6.6.4 Professional Services
6.7 Asia/Pacific
6.7.1 Wireline
6.7.2 Wireless
6.7.3 Broadband
6.7.4 Professional Services
6.8 Latin America/Caribbean
6.8.1 Wireline
6.8.2 Wireless
6.8.3 Broadband
6.8.4 Professional Services
Table of Figures
Chapter I
I-1 Network Support Overview
I-2 Worldwide OSS Sales Revenue Forecast, 2000-2005
($Millions)
I-3 Worldwide Professional Services Revenue, 2000-2005
($Millions)
Chapter II
II-1 Operations Support System Dataflow
II-2 Business Operations Systems Dataflow
II-3 Network Management Systems
II-4 Worldwide Distribution of OSS Sales Revenue, By
Region, 2000 vs. 2005
II-5 OSS Software and Hardware Component Mix, 2000 and
2005
Chapter III
III-1 Service Provider Goal Hierarchy
III-2 DSL Service Provisioning Steps for ILECs and CLECs
III-3 TMN Logical Layer Architecture
III-4 Types of TMN Interfaces
III-5 Network Traffic: IP, Non-IP Data, and
Circuit-Switched, 1997-2004 (Tbit/s per Day)
III-6 Wireless Penetration as a Percentage of Households
in Selected Countries, 1995-2003
III-7 US Wireless Subscriber Forecast by Network
Technology, 1998-2003 (Millions)
III-8 Worldwide Subscribers to Wireless Services,
2000-2005 (Millions)
III-9 Average Monthly Local Bill in the United States,
1993-1999
III-10 Wireless Access Network Topologies, Channelized
versus Packetized
III-11 Satellite Connections to Terrestrial Networks
III-12 HFC Architecture
III-13 SONET/SDH vs. WDM Expansion
III-14 Voice over IP Network Architecture
III-15 Viable Protocol Stacks for Voice over IP
Chapter IV
IV-1 Local Number Portability Using Location Routing
Number Architecture
IV-2 Methods Used to Send CLEC Orders to ILEC Systems,
2000
IV-3 E-Bonding Between a CLEC's and ILEC's OSSes and
Databases
Chapter VI
VI-1 IT Budget Components, 2000
VI-2 OSS Component Mix, 2000 and 2005
VI-3 Worldwide OSS Expenditure Distribution by OSS Type,
2000
VI-4 Global Carrier Revenue Distribution by Region, 2000
and 2005
VI-5 Global Carrier Revenue Distribution, Wireline vs.
Wireless, 2000 and 2005
VI-6 Total Worldwide OSS Sales Revenue, 2000-2005
($Millions)
VI-7 Worldwide OSS Sales Distribution by Region, 2000 and
2005
VI-8 Total North American OSS Sales Revenue, 2000-2005
($Millions)
VI-9 North American Wireline OSS Sales Distribution by
OSS Type, 2000 and 2005
VI-10 North American Wireline OSS Sales Distribution by
Customer Segment, 2000 and 2005
VI-11 North American Wireless OSS Sales Distribution by
OSS Type, 2000 and 2005
VI-12 North American Broadband OSS Sales Distribution,
2000 and 2005
VI-13 North American Broadband OSS Sales Distribution by
Customer Segment, 2000 and 2005
VI-14 Total International OSS Sales Revenue, 2000-2005
($Millions)
VI-15 International Wireline OSS Sales Distribution by
OSS Type, 2000 and 2005
VI-16 International Wireline OSS Sales Distribution by
Region, 2000 and 2005
VI-17 International Wireless OSS Sales Distribution by
OSS Type, 2000 and 2005
VI-18 International Wireless OSS Sales Distribution by
Region, 2000 and 2005
VI-19 International Broadband OSS Sales Distribution by
OSS Type, 2000 and 2005
VI-20 International Broadband OSS Sales Distribution by
Region, 2000 and 2005
VI-21 Total Europe/Middle East OSS Sales Revenue,
2000-2005 ($Millions)
VI-22 Total Asia/Pacific OSS Sales Revenue, 2000-2005
($Millions)
VI-23 Total Latin America/Caribbean OSS Sales Revenue,
2000-2005 ($Millions)
Table of Tables
Chapter I
I-1 OSS Market Segmentations
Chapter II
II-1 OSS Definitions Summary
II-2 Service Provider Employees per 1,000 Access Lines or
Wireless Subscribers, 1994 vs. 1999
II-3 Worldwide OSS Sales Revenue by Type, 2000-2005
($Millions)
II-4 Worldwide OSS Sales Revenue by Region, 2000-2005
($Millions)
II-5 Worldwide OSS Sales Revenue, Wireline vs. Wireless,
2000-2005 ($Millions)
II-6 Worldwide OSS Sales Revenue, Broadband vs.
Narrowband, 2000-2005 ($Millions)
Chapter III
III-1 ILEC Regulatory Checklist
III-2 MSO Service Revenue Forecast by Type, 2000-2005
($Millions)
III-3 Network-Centric vs. Customer-Centric Metrics
III-4 Major LEO/MEO Systems: Costs, Launch Vehicles, and
Services Start Dates
III-5 US-Based GEO Providers: Backers, Satellites and
Services Start Dates
Chapter IV
IV-1 Customer Markets Defined
IV-2 Summary of Common Service Provider OSS Requirements
and Needs Fulfilled
IV-3 Top Ten US Multiple Systems Operators, 1999
IV-4 Ten Largest Cable Systems Ranked by Subscribers,
1999
IV-5 Largest Internet Service Providers Ranked by
Subscribers, 1999
Chapter V
V-1 Alcatel's Service Management Solutions and
Partnerships
V-2 Selected Cisco Network Management OSSes for Service
Providers
V-3 Nortel's Preside Portfolio
V-4 Summary of OSS Offerings by Vendor
Chapter VI
VI-1 Systems Component Categories
VI-2 Customer Markets Segmented
VI-3 Investment Payback Horizons by Market Segment
VI-4 Worldwide Market Segment Revenue Base and Growth,
2000-2005 ($Millions)
VI-5 Elements of OSS Expenditures
VI-6 Global Carrier Revenue by Region, 2000-2005
($Millions)
VI-7 Worldwide OSS Sales by Region, 2000-2005 ($Millions)
VI-8 Worldwide OSS Sales Revenue Forecast, Wireline vs.
Wireless, 2000-2005 ($Millions)
VI-9 Worldwide OSS Sales Revenue by Service Type,
2000-2005 ($Millions)
VI-10 Worldwide OSS Sales Revenue by OSS Type, 2000-2005
($Millions)
VI-11 Worldwide Professional Service Revenue by Region,
2000-2005 ($Millions)
VI-12 Worldwide Professional Service Revenue by Service
Type, 2000-2005 ($Millions)
VI-13 Total North American OSS Sales Revenue, Wireline
vs. Wireless, 2000-2005 ($Millions)
VI-14 North American OSS Sales Revenue by Service Type,
2000-2005 ($Millions)
VI-15 North American Wireline OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-16 North American Wireless OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-17 North American Broadband OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-18 North American Professional Service Revenue by
Service Type, 2000-2005 ($Millions)
VI-19 International OSS Sales Revenue, Wireline vs.
Wireless, 2000-2005 ($Millions)
VI-20 International OSS Sales Revenue by Service Type,
2000-2005 ($Millions)
VI-21 International Wireline OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-22 International Wireless OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-23 International Broadband OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-24 International OSS Professional Services Revenue by
Service Type, 2000-2005 ($Millions)
VI-25 International OSS Professional Services Revenue by
Region, 2000-2005 ($Millions)
VI-26 Europe/Middle East OSS Sales Revenue, Wireline vs.
Wireless, 2000-2005 ($Millions)
VI-27 Europe/Middle East OSS Sales Revenue by Service
Type, 2000-2005 ($Millions)
VI-28 Europe/Middle East Wireline OSS Sales Revenue by
OSS Type, 2000-2005 ($Millions)
VI-29 Europe/Middle East Wireless OSS Sales Revenue by
OSS Type, 2000-2005 ($Millions)
VI-30 Europe/Middle East Broadband OSS Sales Revenue by
OSS Type, 2000-2005 ($Millions)
VI-31 Europe/Middle East Professional Services Revenue by
Service Type, 2000-2005 ($Millions)
VI-32 Asia/Pacific OSS Sales Revenue, Wireline vs.
Wireless, 2000-2005 ($Millions)
VI-33 Asia/Pacific OSS Sales Revenue by Service Type,
2000-2005 ($Millions)
VI-34 Asia/Pacific Wireline OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-35 Asia/Pacific Wireless OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-36 Asia/Pacific Broadband OSS Sales Revenue by OSS
Type, 2000-2005 ($Millions)
VI-37 Asia/Pacific Professional Services Revenue by
Service Type, 2000-2005 ($Millions)
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Telecom
Market
Research,
