2005 OSS Market

20.06.05

This report presents results of Heavy Reading's second world-wide survey of telecom service providers, conducted in February 2005, to determine which operations support system (OSS) sup-pliers are perceived by prospective customers as the market leaders in their respective product categories.

Respondents in-clude 76 service provider employees representing more than 30 network operators. The survey covers 190 different OSS vendors in 13 product categories. Results are compared with our earlier survey (conducted in the third quarter of 2003) to determine changes in customer perceptions of OSS vendors.

The report includes access to a searchable online database of all survey results. Survey data can be searched by a range of demographic criteria, including service provider type (local in-cumbent, national carrier, CLEC, Bell company, etc.), geographic region (U.S., Europe, Asia/Pacific, etc.), company size, and em-ployee job responsibilities


KEY FINDINGS
No single vendor is perceived by service providers as a domi-nant force in the OSS market
Brand recognition in the OSS sector varies widely, even for well-established incumbent vendors
Big IT vendors are having mixed results in their efforts to break into the service pro-vider market
OSS specialists such as Micromuse and MetaSolv are building mindshare with carrier customers
Small OSS vendors have surprising mar-ket clout in the eyes of service providers
Some incumbents are perceived by car-rier customers as slip-ping in their ability to lead the OSS market
Product-line breadth does not improve mar-ket mindshare in the OSS sector

Introduction

Normally, the link between market share and mindshare – the recognition among buyers of a seller's brand and its reputation as a leader in its market sector – is clear and unmistakable. Companies that are widely perceived as leaders in their field tend to get the most business.

It's hard to characterize the operations support system (OSS) industry as "normal" in terms of how it functions in the marketplace. Like OSS products themselves, the OSS business is charac-terized by complex, labyrinthine relationships and channel partnerships that can involve hardware manufacturers, systems integrators, and even competing software vendors. Heavy Reading has previously explored these relationships in a pair of reports: Next-Gen OSS Partnerships and Strategies: Wireline Sector (Vol. 2, No. 8) and Next-Gen OSS Partnerships and Strategies: Wireless Sector (Vol. 2, No. 13).

Although the link between buyers and sellers of OSS software can be indirect enough to be al-most invisible, it still exists. In discussions with hardware vendors about their OSS partnerships, many suppliers acknowledged that demands from service providers and integrators regarding products from specific OSS vendors influence their decisions on which OSS vendors to work with. OSS sales channels may run through other vendors and integrators, but the end customer ar-guably still has the biggest influence on which products succeed.

The 2005 OSS Market Perception Study provides a detailed look at how service provider deci-sion-makers view suppliers in critical OSS market sectors. For this study, Heavy Reading invited service provider employees from around the world to identify the vendors they perceive as the market leaders in these 13 OSS categories:

• Billing
• Mediation
• Revenue assurance and fraud management
• Middleware • Customer relationship management (CRM)
• Multivendor element management systems (EMSs)
• Resource and inventory management
• Fault management
• Performance monitoring
• Service management
• Test and measurement
• Service activation
• Service provisioning

The survey drew responses from 76 service provider employees, representing more than 30 dif-ferent operators worldwide. Respondents included corporate managers, engineers, operations staff, and sales managers from a variety of carriers, including the world's largest incumbents, na-tional carriers, international operators, emerging local competitors, Ethernet service providers, carriers' carriers, cable network operators, and integrated service providers, among others.

Survey results provide a clear and compelling view into how OSS decision-makers perceive the vendors in each product sector. The 13 categories cover 190 different OSS suppliers worldwide, from the largest, publicly traded incumbents to the newest, privately funded startups.

This report builds on our inaugural OSS market perception study, published in October 2003. To-gether, the two reports show which OSS vendors are succeeding in the struggle for customer mindshare and which ones are in danger of losing their grip on their clients – and their revenues.

Key Findings
Key findings of this survey report include the following:

The OSS industry in general lacks any clear-cut market leaders, according to service pro-vider customers. For the 13 product categories covered in the survey, only one vendor – Micro-muse – emerged as the top supplier in more than one category. Brand recognition varied widely depending on product category, even for suppliers with well-established names (including Hew-lett-Packard, IBM, and Lucent Technologies).

Service providers don't have a clear picture of how OSS vendors compare with one an-other on key market leadership metrics. In most product categories, 30 percent or more of survey respondents were unable to name leaders for price, product performance, qual-ity/reliability, or service/support. This lack of leadership recognition strongly suggests that OSS vendors are not succeeding in getting their marketing messages across to their end customers, a failure that cannot help in the effort to boost sales and market share.

Big vendors from the IT world are having mixed success in courting service provider cus-tomers. Major providers of customer relationship management (CRM) systems have largely suc-ceeded in establishing their credentials with service providers, but IT companies venturing into more telecom-centric OSS realms are struggling for recognition. IT giant Computer Associates has little visibility among service providers in the fault management and service management categories, and Sun Microsystems is virtually unnoticed as a service management OSS supplier.

OSS specialist companies are getting more credit for market leadership, at the expense of bigger technology conglomerates. Micromuse emerged as the top vendor across all OSS categories in the current survey, a big improvement over its fifth-place finish in the Fall 2003 rat-ings. Other OSS-focused suppliers that moved up in the ratings include Agilent Technologies, MetaSolv Software, and Amdocs. Meanwhile, Fall 2003 survey winner Hewlett-Packard saw its ratings slide this time around, as did IBM and Lucent.

Survey Methodology
This Heavy Reading study was conducted in two stages. In the first stage, a list of product cate-gories and vendors was developed using a report entitled "Who Makes What," posted on October 20, 2004, on the Website of Next Generation Services, the Light Reading publication that tracks the OSS industry. The initial version of the report included a set of 13 OSS categories with lists of vendors and invited readers to propose revisions to the categories and lists. Based on these submissions, changes were made to the vendor lists in a number of product categories.

In the second stage of the study, an online questionnaire was developed based on the product categories and vendor lists from the refined "Who Makes What" report. Potential survey respon-dents were then solicited via email to participate in the study. Only responses from participants employed by service providers were included in the final results.

Heavy Reading solicited participation from potential respondents via email invitations targeted specifically to service provider mailing lists. Email invitations were sent on February 2, 2005; Feb-ruary 8, 2005; February 15, 2005; and February 23, 2005. As an incentive, participants were en-rolled in a contest to win a one-year subscription to Light Reading Insider (list price ,350), a monthly research service from Light Reading.

The questionnaire was constructed so that respondents answered market perception questions involving only those product categories with which they claimed to be familiar.
Survey participants rated vendors in each product category according to five criteria:
• Name recognition
• Price leadership
• Product performance leadership
• Product quality and reliability leadership
• Service and support leadership

Participants were also invited to submit "write-in" comments on other vendors they saw as being in that market segment, as well as on the key problems they perceive in each product category. Finally, respondents in each category were asked to rate the importance of the four key leader-ship metrics – price, product performance, product quality/reliability, and service/support – in evaluating equipment suppliers. These results were used to determine the relative weight of each metric in determining vendor rankings in individual product categories.

Invitations to participate drew responses from 145 potential survey candidates. All responses coming from candidates who said they did not work for a service provider were eliminated from the survey database. The final base of 76 survey participants represents employees from more than 30 different service providers worldwide. The service providers included in the survey were:

• American Fiber Network Ltd.
• AT&T Corp.
• Belgacom SA
• BellSouth Corp.
• Bezeq International Ltd.
• Brampton Telecom
• BT Group plc
• Bulgarian Telecommunications Co. AD
• China Telecommunications Corp.
• Colombia Telecomunicaciones S.A.
• Comcast Corp.
• Eircom Ltd.
• Global Crossing Ltd.
• Golden Line Ltd.
• MetroNet
• Nextel Communications Inc.
• OTE S.A.
• Pacific LightNet Inc.
• Penn Telecom Inc.
• Reliance Infocomm Ltd.
• SBC Communications Inc.
• Sisna Inc.
• Telecom New Zealand Ltd.
• Telefònica SA
• Telekom Malaysia Bhd.
• TeliaSonera AB
• Telkom SA Ltd.
• Tellas SA
• Telus Corp.
• T-Systems Inc.
• Verizon Communications Inc.
• Videsh Sanchar Nigam Ltd. (VSNL)
• WilTel Communications Group Inc.



Overall Findings
The 2005 OSS Market Perception Study is based on a collection of surveys covering 13 differ-ent product categories. Dividing the survey into separate components allowed us to limit the re-spondent base for each category only to those service provider employees who have direct knowledge of and involvement in each product sector covered.

Although the main thrust of the study is to evaluate buyer perceptions in individual categories, it is also possible to create a composite market perception picture for vendors that offer products in multiple categories. In most cases, these composite pictures – derived by averaging market per-ception scores across different product lines – provide important insight into how OSS vendors are perceived by the service provider market in general.

For this study, Heavy Reading performed cross-category tabulations for 23 different OSS suppli-ers, which were chosen by the breadth of their product lines: All vendors with products in four or more of the 13 categories covered by this study were included in the cross-category tabulations.

Vendor Ratings Across Product Categories
Average Ratings for Vendors in Four or More Product Categories

RANK 2003 RANK VENDOR TOTAL # OF CATE-GORIES RECOG-NITION PRICE PRODUCT PERFORM-ANCE QUALITY & RELI-ABILITY SERVICE & SUP-PORT
1 5 (tie) Micromuse Inc. 6 40.6% 15.5% 18.7% 17.6% 15.5%
2 8 Agilent Technologies Inc. 6 38.7% 14.0% 20.2% 19.9% 14.5%
3 1 Hewlett-Packard Co. 5 42.1% 15.9% 13.7% 14.5% 15.2%
4 9 MetaSolv Software Inc. 5 35.2% 7.5% 14.1% 15.2% 11.4%
5 7 Amdocs Ltd. 4 34.8% 6.1% 12.0% 10.9% 11.7%
6 3 IBM Corp. (includes IBM Tivoli) 4 31.9% 5.9% 6.3% 12.6% 18.9%
7 2 Lucent Technologies Inc. 8 31.8% 6.8% 10.9% 14.0% 11.3%
8 4 Telcordia Technologies Inc. 6 32.1% 4.0% 8.9% 9.8% 7.9%
9 NR Rodopi Software Inc. 4 9.5% 4.6% 4.1% 3.4% 3.8%
10 NR Intec Telecom Systems Inc. 4 16.3% 4.5% 3.9% 4.6% 1.9%
11 NR Bridgewater Systems Corp. 5 10.3% 2.3% 3.0% 0.8% 3.0%
12 14 (tie) SaskTel International 4 7.5% 2.0% 1.9% 1.9% 2.2%
13 NR WatchMark-Comnitel (now known as Vallent Corp.) 4 4.5% 0.0% 3.3% 3.3% 2.6%
14 11 Telution Inc. 5 5.5% 0.9% 1.8% 1.9% 2.1%
15 24 Ai Metrix Inc. 5 3.5% 2.3% 2.2% 0.8% 1.0%
16 18 TTI Team Telecom Interna-tional Ltd. 8 7.9% 1.2% 0.0% 0.0% 0.5%
17 13 Axiom Systems Inc. 4 7.5% 0.8% 0.0% 0.0% 0.0%
18 17 Sheer Networks Inc. 6 4.8% 0.8% 0.8% 0.0% 0.0%
19 20 UshaComm Communications Technology Inc. 5 4.2% 0.0% 0.0% 0.6% 1.5%
20 NR NTG Clarity Networks Inc. 5 4.0% 2.0% 0.0% 0.0% 0.0%
21 NR Protek (now Viziqor Solutions) 8 3.8% 0.0% 0.5% 1.5% 0.0%
22 NR Viziqor Solutions 8 0.7% 0.0% 0.0% 0.4% 0.0%
23 NR ZZNode Corp. 6 0.0% 0.0% 0.0% 0.0% 0.0%



Cross-category results clearly show that no single OSS vendor comes close to dominating the field in the eyes of service providers. Brand recognition is not assured even for the largest, most established OSS suppliers: Hewlett-Packard, which garnered the highest name recognition across all product categories, had an average recognition rating of just 42.1 percent. By contrast, the most recognized vendor in the wireline equipment sector, Cisco Systems, had an average recognition rating of more than 70 percent in Heavy Reading's 2005 Wireline Telecom Equip-ment Market Perception Survey.

OSS specialist Micromuse emerged at the front of the pack in our current survey. In the cross-category ratings, Micromuse had the second-highest average score in all five survey categories, but its scores were more consistent than those of the individual category leaders (HP for name recognition and price, Agilent for product performance and quality/reliability, and IBM for ser-vice/support).

Micromuse's results in the current survey represent a significant improvement over its leadership scores in the Fall 2003 survey, where it tied for fifth with ADC Telecommunications (ADC exited the OSS market by selling its Metrica line to WatchMark-Comnitel in 2004).

No doubt name recognition in the OSS sector is harder to come by than in most other technology sectors. OSS brand awareness is affected by a number of factors, including the insular nature of many incumbent back-office operations and the use of indirect sales channels (either through systems integrators or other hardware and software vendors) in OSS sales and marketing. The degree to which lack of brand awareness apparently affects large, incumbent suppliers, as well as the dozens of startups, is startling.

Following is an analysis breakout for the top incumbent vendor covered in this survey.
Micromuse
Number of categories: 6 (leading vendor in 2 categories)

Key strengths: Generally well regarded across all leadership categories; strongest categories are fault management, multivendor EMS, and service management

Weaknesses: Name recognition is weak outside fault management and EMS sectors
As a software specialist, Micromuse can't rely on any carryover effect from other product sectors (i.e., hardware) to bolster its service provider mindshare. So, given the relative lack of visibility of OSS compared with wireline and wireless hardware vendors, Micromuse is doing a fairly good job of getting its brand message across to service providers – at least some of the time.

Micromuse is building a strong reputation in the service assurance space, earning top overall marks for fault management and service management. Service provider buyers in the survey were less impressed by its performance monitoring product, which has kept Micromuse from staking a secure claim as the undisputed top choice for service assurance.

Micromuse took a big step toward addressing that portfolio weakness with its April 2005 an-nouncement that it will purchase Quallaby Corp., which graded out as the top startup in the per-formance monitoring category in the current survey.

Overall, the perception ratings suggest that service providers see Micromuse as a steady and reliable OSS supplier. It doesn't dominate in any individual category, but it is viewed as delivering an attractive combination of price, product quality, and after-sale service and support.

Category Close-Ups Service Assurance: Fault Management

Fault management systems are a key unifying point in network management operations. The value of a fault management system is measured by its ability to reduce the time it takes to re-solve a problem in the network. They offer a single view for the array of network elements and element management systems in a network, processing hundreds of thousands of events per day, filtering downstream events, and attempting to isolate the cause of an alarm using rules and correlation logic. Many fault management OSSs allow network-management staff to log in to spe-cific network elements to check for additional information that might be relevant to the alarm.

Although some products in this category handle only fault management, most often perform other service assurance tasks as well, such as performance monitoring.

Fault management is the largest category in the service assurance OSS sector, as the number of high-profile vendors in this sector attests. Despite the crowded market, there has yet to be a sig-nificant vendor shakeout in the fault management sector. In fact, a couple of established vendors entered this sector via acquisition in 2004 – Concord Communications bought Aprisma Manage-ment Technologies, and storage giant EMC acquired System Management Arts (Smarts).

Fault Management – Overall Results

RANK 2003 RANK VENDOR RECOG-NITION PRICE PRODUCTPERFORM-ANCE QUALITY & RELI-ABILITY SERVICE & SUP-PORT
(number of responses) (35) (27) (31) (29) (24)
1 3 (tie) Micromuse 57.1% 25.9% 35.5% 27.6% 20.8%
2 2 Hewlett-Packard 54.3% 18.5% 22.6% 24.1% 20.8%
3 7 Agilent Technologies 48.6% 22.2% 25.8% 20.7% 16.7%
4 3 (tie) Lucent Technologies 40.0% 3.7% 9.7% 17.2% 8.3%
5 5 Telcordia Technologies 34.3% 3.7% 9.7% 6.9% 12.5%
6 1 Nortel Networks 31.4% 3.7% 9.7% 6.9% 8.3%
7 6 IBM Tivoli 34.3% 3.7% 0.0% 10.3% 16.7%
8 NR Marconi 11.4% 3.7% 3.2% 3.5% 0.0%
9 18 (tie) SaskTel 5.7% 3.7% 3.2% 3.5% 4.2%
10 (tie) 11 Computer Associates 14.3% 0.0% 3.2% 3.5% 0.0%
10 (tie) 10 Harris 14.3% 0.0% 3.2% 3.5% 0.0%
12 8 (tie) Spirent 11.4% 0.0% 3.2% 3.5% 0.0%
13 8 (tie) Smarts (now owned by EMC) 5.7% 0.0% 3.2% 3.5% 4.2%
14 NR Tektronix 8.6% 7.4% 0.0% 0.0% 0.0%



15 18 (tie) ComArch 5.7% 0.0% 0.0% 3.5% 0.0%
16 15 (tie) Eftia OSS Solutions 5.7% 3.7% 0.0% 0.0% 0.0%
17 15 (tie) TTI Team Telecom 8.6% 0.0% 0.0% 0.0% 4.2%
18 (tie) 22 Rocket Software 2.9% 0.0% 3.2% 0.0% 0.0%
18 (tie) NR Smallworld Technology (GE) 2.9% 0.0% 3.2% 0.0% 0.0%
20 15 (tie) Aprisma Management Tech. 8.6% 0.0% 0.0% 0.0% 0.0%
21 (tie) 12 MegaSys Computer Tech. 2.9% 0.0% 0.0% 0.0% 0.0%
21 (tie) NR NTG Clarity Networks 2.9% 0.0% 0.0% 0.0% 0.0%
21 (tie) 21 Pivetal 2.9% 0.0% 0.0% 0.0% 0.0%
21 (tie) 13 Sheer Networks 2.9% 0.0% 0.0% 0.0% 0.0%



Service provider respondents in this sector gave the highest overall ratings to Micromuse, a clear indication that its focus on IP-based management OSSs is being validated in the market. Micro-muse's ratings in the fault management sector improved across all leadership categories com-pared with the Fall 2003 survey, with its biggest improvement coming in product performance. Micromuse's mindshare improvement came as service provider respondents gave considerably lower marks to the Fall 2003 survey winner, Nortel. Nortel's brand recognition score dropped pre-cipitously from the 69.6 percent rating it received in 2003, while its scores in other leadership categories also slipped (although not as drastically).


Service Assurance: Service Management

Service management is the newest component of the OSS group that makes up the service as-surance sector. Using data from fault management and performance management systems, ser-vice management products deliver a view of service performance based on the customer's view, rather than the network manager's view. Service management combines elements of order man-agement, network performance, and network usage mediation applications to present network data in the context of a specific service. Among the tasks performed by service management software are measuring the time it takes to process an order, monitoring the performance of ap-plication services, and tracking the time it takes to restore services in the event of network failure.

Service management functions are important to carrier efforts to differentiate their offerings by delivering service-level agreements to their corporate customers. This type of OSS requires new metrics to define levels of acceptable performance, and often entirely new monitoring statistics. These systems are used with SLAs and provide the information to determine whether the SLA metrics have been met by the service provider.

Service Management – Overall Results

RANK 2003 RANK VENDOR RECOG-NITION PRICE PRODUCT PERFORM-ANCE QUALITY & RELI-ABILITY SERVICE & SUP-PORT
(number of responses) (25) (19) (20) (20) (18)
1 5 Micromuse 32.0% 15.8% 10.0% 10.0% 11.1%
2 4 Alcatel 28.0% 5.3% 10.0% 10.0% 5.6%
3 10 Agilent Technologies 28.0% 10.5% 10.0% 5.0% 5.6%
4 14 MetaSolv Software 28.0% 0.0% 10.0% 10.0% 11.1%



5 1 Cisco Systems 32.0% 5.3% 5.0% 5.0% 5.6%
6 12 Ericsson 24.0% 10.5% 5.0% 5.0% 5.6%
7 15 (tie) InfoVista 12.0% 5.3% 5.0% 10.0% 5.6%
8 3 Nortel Networks 20.0% 0.0% 10.0% 5.0% 5.6%
9 6 Lucent Technologies 28.0% 0.0% 5.0% 5.0% 0.0%
10 (tie) 19 Keynote Systems 8.0% 0.0% 5.0% 5.0% 5.6%
10 (tie) 22 WatchMark-Comnitel (Metrica) 8.0% 0.0% 5.0% 5.0% 5.6%
12 17 Trendium 12.0% 0.0% 5.0% 5.0% 0.0%
13 7 Telcordia Technologies 24.0% 0.0% 0.0% 0.0% 5.6%
14 11 Tekelec 8.0% 5.3% 5.0% 0.0% 0.0%
15 9 IBM Tivoli 20.0% 0.0% 0.0% 0.0% 0.0%
16 NR NTG Clarity Networks 8.0% 5.3% 0.0% 0.0% 0.0%
17 8 Computer Associates 16.0% 0.0% 0.0% 0.0% 0.0%
18 24 (tie) Rocket Software 4.0% 0.0% 0.0% 5.0% 0.0%
19 (tie) 18 Brix Networks 8.0% 0.0% 0.0% 0.0% 0.0%
19 (tie) 20 TTI Team Telecom 8.0% 0.0% 0.0% 0.0% 0.0%
21 (tie) NR Bridgewater Systems 4.0% 0.0% 0.0% 0.0% 0.0%
21 (tie) 27 (tie) Dirig Software 4.0% 0.0% 0.0% 0.0% 0.0%
21 (tie) NR Protek 4.0% 0.0% 0.0% 0.0% 0.0%
21 (tie) 2 Sun Microsystems 4.0% 0.0% 0.0% 0.0% 0.0%
21 (tie) 15 (tie) Smarts (now owned by EMC) 4.0% 0.0% 0.0% 0.0% 0.0%




Micromuse emerged with the best overall scores in this category.

Survey results clearly show that service provider OSS buyers do not have a strong grasp on the service management market. Nearly 25 percent of respondents in this sector could not identify any vendors; more than 44 percent could not name a leader for service and support, and 40 per-cent could not identify market leaders for product performance or quality/reliability. Nearly six out of ten respondents in this category could not name a price leader.

The lack of market definition is reflected in the vendor ratings. Even Cisco Systems, the most widely recognized brand in the telecom industry based on other market perception surveys con-ducted by Heavy Reading, is struggling for recognition in the service management sector, with only 32 percent of respondents naming Cisco as a player.

One apparent trend shown in the survey results is that OSS specialists are getting more attention from service providers than are systems vendors or IT software houses. In our Fall 2003 survey, Cisco, Sun Microsystems, Nortel, and Alcatel topped the market perception charts. Alcatel kept its relative leadership position in the current survey, but Micromuse, Agilent, and MetaSolv all gained significant ground in the overall standings.