According to respondents to our June 2004 report, "Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector," OSS suppliers are responding with energetic innovation – enough to create noisy clutter in the ears of buyers. Overwhelmed with both hardware and software choices, wireless service providers are pushing back on the number of suppliers with which they're willing to deal directly. As a result, outsourcing of OSS selection and integration has become the norm, and prime contractors stand like bouncers at the door.
So how are suppliers charming their way backstage into the wireless OSS software hullabaloo?
Based on our surveys, questionnaires, and interviews, the keys come in three:
- Partner to gain or reinforce a service management song to sing.
- Partner to gain or reinforce a lifecycle management song to sing.
- Partner to complement the stories of prime contractors.
It's the services, silly. Out of 514 channel partnerships cited by our respondents, 60.3 percent incorporated service-layer OSSs (service management, service activation, service provisioning, mediation, and revenue assurance). Half that number incorporated network-layer OSSs (element management, inventory management, fault management, and performance monitoring), while the remainder incorporated billing, CRM, or middleware.
There's little doubt that service management is #1 with a bullet. For instance, half of the partnerships reported by inventory management OSS supplierCramer Systems Ltd. are with service provisioning software suppliers. Suppliers of service provisioning, service activation, and mediation products, such as Tertio Telecoms Ltd., topped our Channel Quality Scores charts.
The classic tele-management pyramid places element and network management at the bottom, feeding up through service management to business process management at the top. While today there is certainly demand for managing large volumes of newly deployed wireless data and broadband equipment, the wireless carriers are first and foremost in a death race to win customers by releasing the coolest services as quickly as possible. The days in which three new circuit-switched enhanced services were developed each year are past; in today's IP and Web environment, up to hundreds of new, enhanced features, functions, and bundles might be released every twelve months. If no one buys it, send out the next cool diddy.
So more than anything, the carriers want an OSS infrastructure that enables them to proliferate services. For OSS, this means the hot numbers are those that solve near-term, cross-domain challenges at the service-management layer and revolve around service provisioning, service activation, and service management. It also means smarter inventory management systems that incorporate provisioning functions; mediation systems that can measure usage by any parameter and provide usage analytics; and middleware that makes inter-OSS data- and process-sharing more seamless.
Note: Even apart from the wireless sector's current speed-to-market obsession, OSS itself continues to evolve closer to its long-standing holy grail: a correlated view of network, service, and subscriber. Any OSS solution that provides a view of only one of these, isolated from the others, can now be called suspect.
Partnerships that solve cross-domain, lifecycle challenges win. It's not enough to get with the services refrain. Providers also want to automate the flow-through of data and processes from service creation, selling, order-taking, and activation to mediation, billing, and customer care. A billing company such as CSG Systems International Inc. (Nasdaq: CSGS) can solve some revenue-assurance problems, but such problems are often rooted in downstream OSSs in the form of bad data, so CSG is now co-selling with revenue assurance OSS supplier Connexn Technologies Inc. to present a single view of revenue and cost management across multiple OSS domains, from inventory to provisioning, mediation, and customer relationship management. Revenue lifecycle, service lifecycle, customer lifecycle, and network lifecycle solutions are tops in demand.
Join the bouncer's entourage. Wireless operators are in a hurry to market at exactly the time when new services and the software to support them have leaped to a substantially new level of complexity. Operators are turning much of that complexity over to prime contractors, namely systems integrators, major hardware suppliers (particularly data equipment suppliers), or comprehensive solution OSS suppliers, putting them in charge of deciding who's hip enough to get in.
The big OSS suppliers are seeking to solve the cross-domain, lifecycle challenges through acquisition (Amdocs Ltd. (NYSE: DOX) acquires Xacct, Telcordia Technologies Inc. acquires Granite Systems Inc.) and their own product creep. As incumbent suppliers, they are often de facto prime contractors. Some 47 percent of channel partners identified in our survey are other OSS suppliers.
The systems integrators are seeing and acting on opportunities to carry their BSS success in telecom (human resources, accounting, CRM) into process software that touches the services and networks as well. Some 40 percent of channel partners identified in our survey are SIs. Hewlett-Packard Co. (NYSE: HPQ), for one, reports that its OSS integration services are now playing catch-up with demand, particularly in the wireless sector.
Only 13 percent of channel partners identified in our survey are hardware makers. This would seem counterintuitive, since the leading hardware suppliers are OEMing small manufacturers' 3G piece parts, so they are the funnel to customers and potential channel partners for bundled equipment and potentially OSS software, as is often the case in the wireline sector. However, in some notable cases (Alcatel SA, LM Ericsson, Lucent Technologies Inc.), hardware makers are effectively less available as channels because they're offering pretty comprehensive OSS portfolios (as well as integration services) themselves. Still, those big hardware players do refer independent software vendor (ISV) products, and others (e.g. Nortel Networks Ltd.) are happy to stick to their hardware and EMS/NMS knitting and assemble OSS solutions from ISVs through referral and resale.
The bottom line is that there's only so much room behind the wireless operations stage these days. But there's a very big pizza pie waiting for the lucky few who get in.
— Peter Lambert, Analyst, Heavy Reading