Good News for OSS and Enterprise Software Vendors? By Barbara Lancaster

Service Provider Spending Increasing Again
In the recently-released TIA 2005 Market Review and Forecast , spending on network equipment, software, services, handsets, transport, and enterprise equipment, is predicted to grow steadily through 2008 to reach a CAGR of 9.5% in North America, and a somewhat higher 10.6% in Europe and Asia Pacific. Even Toll Services are expected to eke out a 1.7% growth.

Does this mean that OSS vendors should be gearing up for a few great years? Not so fast. Inertia will definitely play a role in channeling some of this increased spending to the usual suspects, but Service Providers cannot continue to spend money on OSS infrastructures that are too complex, too expensive, and too difficult to maintain. Lack of real progress by the OSS vendor community in reducing the complexity and high costs of the OSS infrastructure, could well mean that more money will go to Enterprise software applications. In particular, the following factors will demand a different approach to OSS spending:

• real progress in new computing technologies designed to solve Enterprise computing requirements,
• changing Service Provider requirements created by new network technologies enabling the launch of new services,
• simplified pricing, zero-touch customer service, and the inexorable "commodization" of services,
• consolidation of Service Providers and of OSS vendors
• proliferation of nimble, low cost Service Providers offering niche services

In monopoly times, the Operations Support Systems (OSS) infrastructure required to deliver, maintain, and bill telecommunications services was built in-house by a carrier's large internal IT organizations. A few Commercial Off The Shelf (COTS) applications were available for purchase, but overwhelmingly, each carrier relied on their own staff to define, design, build, and operate software uniquely tailored to their business needs.

With the introduction of competition, hundreds of new operating companies surged into the market. They did not have the time to build their own applications, nor did they think they needed the complex infrastructures that apparently contributed to the incumbents' inability to react quickly to market pressures.

As we all know, hundreds of Independent Software Vendors (ISVs) rushed to fill the void with COTS packages to handle ordering, provisioning, network management, rating, billing and invoicing, and more. Some of the ISVs were new companies formed by people with telecommunications experience, others had software development experience in other industries, and some were spin-offs of incumbent in-house development teams. Service Providers and ISVs both faced intense pressure to get to market quickly, creating an environment where software requirements were sketchily defined, and the resulting software applications were typically less than comprehensive.

The requirement to stitch together several different applications to cover the end-to-end business of delivering service to customers, keeping it all working, getting bills out and payments in, created another burgeoning business: Systems Integration.

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