10. OSS: Who Are These Guys?Telecom providers worldwide now spend more than $40 billion a year on operations support system (OSS) software to keep their networks running, but the companies supplying that critical software aren't doing an effective job of establishing their brand identities with their customers, according to Heavy Reading's 2005 OSS Market Perception Study. Ironically, the company that had the best perception ratings across multiple product categories -- Micromuse Inc. (Nasdaq: MUSE) -- ended the year by announcing it was being bought by IBM Corp. (NYSE: IBM), which also has struggled to gain a foothold in the telecom software sector.

9. Trouble at the Multiservice Switch?The push by network operators to deliver a full range of services over a converged IP/MPLS infrastructure is making life tough for multiservice switch vendors, a group that includes some of the world's largest telecom equipment companies. They're in danger of falling behind customers' shifting priorities, notes Scott Clavenna, author of The Future of Multiservice Switching in Converged IP/MPLS Networks. "There is a disconnect between what customers now say they want and how vendors are positioning themselves. Left unaddressed, this expectation gap will challenge the status of multiservice switch vendors in the market, as router vendors offer up solutions optimized around IP services," he says.

8. Nothing Phony About Pseudowires"Pseudowire technology is the solution for convergence in future telecommunications networks," Clavenna writes in Pseudowires and the Future of Transport and Access Networks. And he means nearly every aspect of every type of network. The ability of pseudowire products to channel legacy data services, such as Frame Relay and ATM, over IP-based networks has undeniable appeal to network operators who want to continue to sell those profitable services even as they migrate to next-gen architectures, Clavenna writes.

It's an edge-router play so far, but the market has promising potential for the wave of pseudowire specialists that includes Axerra Networks Inc. , Hammerhead Systems Inc. , Mangrove Systems Inc. , Overture Networks Inc. , and RAD Data Communications Ltd.

7. They Did It HuaweiSuddenly, Huawei Technologies Co. Ltd. of China is a major force. It's already surpassed several incumbent vendors in perceived market leadership, according to results of a worldwide survey of service provider professionals published in Heavy Reading's 2005 Wireline Telecom Equipment Market Perception Study.

Huawei's huge jump in market perception ratings from Heavy Reading's Fall 2003 survey is the most remarkable and probably most important development in the wireline telecom equipment industry. Huawei still has a minimal presence in the North American market, but it's landed some big contracts elsewhere including a piece of the BT Group plc (NYSE: BT; London: BTA) 21CN project, and that success had led to some interesting acquisition theories. (See BT Unveils 21CN Suppliers and Could Huawei Buy Marconi?.)

6. The ROADM to EthernetThe rush to embrace Ethernet as a carrier-class service is sparking renewed interest in reconfigurable optical add/drop multiplexers (ROADMs). "Rollouts of triple-play access infrastructure and business Ethernet services infrastructure will drive demand for reconfigurable optical network systems," writes Clavenna in ROADMs and the Future of Metro Optical Networks. "Ethernet and triple play will push a lot of traffic onto carrier interoffice facilities and metro core facilities, requiring more than simple, incremental bandwidth additions. The unique transport requirements of these services will force operators to move to a new generation of optical systems and architectures," he predicts.

Surveying service providers worldwide, Heavy Reading saw the ROADM market beginning to soar in late 2005, with most operators focused on 2006-2007 as the timeframe for more aggressive deployments.

5. SDP: Clear as MudService delivery platforms (SDPs) continue gaining acceptance as a way for telecom network providers to deliver new services quickly and inexpensively, but SDP suppliers need to do a much better job of explaining what their products do and how they fit into a carrier's service delivery environment. It's "a weakness that threatens to hamper SDP market development," notes Caroline Chappell, analyst at large with Heavy Reading and author of The Future of SDP.

"Operators may stay with their stovepipe service delivery approach because it seems simpler than trying to understand vendors's very different -- and often contradictory -- architectural approaches. Or they will buy the names they've heard of, rather than exploring best-of-breed products whose descriptions they don't understand," she writes. Some SDP standards would improve things, but that's a ways off -- vendors are still at the stage of trying to make their SDPs look different. (See IBM Unveils IMS Offerings, Lucent Launches SDP , HP, Telcordia Hop SDP Bandwagon, HP Takes Flash Approach to SDPs, Microsoft Preps for Telco Battle, Alcatel Launches Service Manager, and Sun Announces SDP Plan.)

4. ATCA Changes OEM Priorities ... The availability of Advanced Telecom Computing Architecture (AdvancedTCA) components and systems is accelerating a major shift in the telecom supply chain, with systems integrators taking on much of the development previously kept in-house by systems OEMs. "ATCA opens up new opportunities for silicon vendors, system integrators, OEMs, and service providers," notes Simon Stanley, Heavy Reading analyst at large and author of AdvancedTCA: Who's Doing What. "As with all paradigm shifts, there will be winners and losers -- making this a key market to watch." (See ATCA Finds Its Way.)

Further ATCA research published this week by Light Reading's Comm Chip Insider estimates that about one-quarter of all systems OEMs are working with integrators to bring ATCA into their products – a huge change from the do-it-yourself model that OEMs have almost exclusively followed up to now. (See ATCA Initiates Launch Sequence.)

3. ... While IMS Reshapes Service DeliveryIP Multimedia Subsystem (IMS) is generating apparently unstoppable momentum as the potential network and service architecture for delivering revenue-generating IP applications. It's also a keystone in the fixed/mobile convergence trend, making IMS a hot issue for wireline and wireless providers alike. "IMS has won near-universal support among equipment vendors, and most are now tailoring their products to meet its specifications," notes Graham Finnie, Heavy Reading Senior Analyst and author of IMS and the Future of Network Convergence.

Naturally, that's made IMS attractive, with Heavy Reading identifying at least 70 companies with IMS propositions as of July. Not the least of the bunch is Lucent Technologies Inc. (NYSE: LU), which has used IMS to spearhead a corporate turnaround that turned the heads of the 2005 Leading Lights judges. (See Lucent Lands BellSouth IMS Deal, Lucent in the Lead for Verizon IMS?, LR Names 2005 Leading Lights Winners and A Night of Lighties.)

2. Survivor: IPTVIt's at the top of every incumbent telco's to-do list: Get IPTV. "Competition, specifically in North America, is the primary driver for the buildout of IPTV networks and the delivery of IP video services," writes Heavy Reading senior analyst Rick Thompson in IPTV and the Future of Telecom Video Network Architectures.

Some small North American carriers are already delivering IPTV, but the plans at the Bell companies -- driven by a cable industry nipping on their heels -- create the best opportunities for vendors, he writes. But success isn't in the bag, as video comes with pitfalls including the "unprecedented scale" of these IPTV plans, he writes. (See Verizon's Elby: IPTV Could Take Years, Source: SBC Plans IPTV for Businesses, BellSouth's Smith Details IPTV Plans, and SBC, Microsoft Defend Lightspeed.)

The push by telecom service providers to deliver IP video as part of a triple-play service bundle is leading to a massive overhaul of carrier broadband edge networks – and the creation of a new class of broadband edge equipment, as Thompson describes in his latest report, IP Video and the New Broadband Edge.

1. Carrier Ethernet Gone WildOn sheer quantity of Heavy Reading pages, this one deserves to win, but it also happens to be a defining movement for telecom right now, more so than IPTV. Network operators stampeded to deliver Ethernet services to business users in 2005, as documented in the Heavy Reading report, Ethernet Services Carrier Scorecard: North America. Of the roughly 180 North American service providers evaluated, 122 were selling a total of 585 Ethernet services and applications.

The result, according to the Carrier Ethernet Equipment Market Outlook, is a potential boom in carrier-grade Ethernet platforms, particularly for switch/router vendors and particularly as Ethernet expands into the triple-play realm for residential customers. And that, in turn, was the subject of a third report: Sonet/SDH-to-Ethernet Migration Strategies. "The transition to the EOTN – Ethernet Optical Transport Network -- is already underway in the metro network, and is showing signs of progress in carrier access and core networks as well," Clavenna notes in that report. (See Last Call for Sonet/SDH?.)

— Craig Matsumoto, Senior Editor, Light Reading, and Dennis Mendyk, Managing Director, Heavy Reading