More OSS Deals on the Way?

When Agilent Technologies Inc. (NYSE: A) agreed to buy Objective Systems Integrators Inc. (OSI) (Nasdaq: OSII) on Monday in a cash transaction worth about $665 million, it turned the spotlight on a part of the optical networking market that's moved from back burner to the front.

Getting hotter by the day are operations support systems (OSSs), the complex software that allows telecommunications carriers to set up, configure, provision, and bill customers for services in their networks. OSSs, experts say, are the key to unlocking the real value of optical networks.

It's a market that's set to take off, according to research published Wednesday by Communications Industry Researchers Inc.. CIR says third-party management and provisioning tools will be a key force driving the optical network software market to $7.6 billion by 2004.

Unfortunately, the takeoff seems stalled. Most carrier OSSs can interact with optical equipment and software only through proprietary, extremely costly and complex interfaces, built to order by specialized integrators.

What's needed, according to CIR and other sources, are third-party products that give carriers a headstart on unifying their OSSs with optical gear. That calls for software set to work with networks based on lambdas, not static circuits.

And such software is as rare as hens' teeth. Among the tiny advance guard of vendors involved are CrossKeys Systems Corp., HarmonyCom, and Syndesis Ltd.. Crosskeys and Syndesis have both engaged in OSS integration projects with Sycamore Networks Inc. (Nasdaq: SCMR). Syndesis also has work underway with Cisco Systems Inc. (Nasdaq: CSCO), Lucent Technologies Inc. (NYSE: LU), and several carriers to integrate OSSs and optical equipment management programs -- also known as element managers.

But these examples are few. "The market's in the very early stages. It's going to be at least a couple of years, perhaps more, before real solutions appear," says Dan Baker, founder and research director at Technology Research Institute, a firm that specializes in studying telecom IT and OSSs. Baker says vendors and carriers are still hung up on figuring out how to provision and bill for combined DSL, IP, and ATM services. "Optical's far away," he says.

Signs that it's getting closer were evident in Monday's announcement by Agilent. Acquiree OSI is a company that specializes in OSS integration. Agilent, which has equipment for monitoring broadband connections, plans to integrate its gear with OSI software to form what it calls "integrated systems for service assurance, service delivery, and service usage." In its announcement about the purchase, Agilent continually cited the multibillion-dollar potential OSS market.

Unfortunately, sources say Agilent's goal is still far out of sight. Part of the problem is that Agilent must find a way to unite its test equipment for monitoring DWDM (dense wavelength-division multiplexing) channels with the software OSI provides to monitor and manage Sonet gear. Syncing up these products will be a basic prerequisite for managing and provisioning optical nets. But it's no easy task: "Sonet's a lot different from DWDM," says Baker. "DWDM offers a lot more intelligence and control."

Agilent and OSI agree to the importance of integrating DWDM monitoring with OSS integration. In fact, OSI says that DWDM monitoring will be key to the future success of its products with Agilent. "The big synergy with Agilent is that you can get information off the wire, at the probe level," says Randy Custeau, OSI's VP of products and technology. Getting the live traffic input from DWDM channels will be the feature enabling OSI's OSS integration software to respond dynamically to service provisioning requests, he says. But he admits that a schedule for integrating OSI and Agilent's products hasn't been nailed down yet.

For most observers, the Agilent/OSI acquisition is a beacon for what's needed. "There's a trend to combine test and measurement with element management systems and OSSs," says Elisabeth Rainge, research manager at International Data Corp. She points to other vendors exploring the potential of integrating DWDM diagnostic tools with management software, including Acterna Corp., the test equipment company formed by the combination of TTC and Wavetek Wandel & Goltermann earlier this year, and Digital Lightwave Inc. (Nasdaq: DIGL). Both companies offer DWDM diagnostic probes. Acterna also offers its own OSS, but so far it works with its Sonet test gear and isn't integrated directly with its DWDM testers.

In October, Digital Lightwave announced a joint marketing and product integration agreement with Clear Communications, a maker of broadband performance management software. So far, however, neither company has much to say about the deal. Clear says it has "no news" to report. And "Ask Clear," was all the info offered by Digital Lightwave.

Acterna wasn't able to offer any information about potential deals with OSS vendors at press time.

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

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