Magic Quadrant for Operations Support Systems

24 October 2013 ID:G00248651
Analyst(s): Martina Kurth

VIEW SUMMARY

This Magic Quadrant rates vendors that sell end-to-end solutions for service assurance and fulfillment, including network resource management, service inventory and catalog, and order management; also, provisioning and activation for communications service providers.

Market Definition/Description

Definition

The market for operations support systems (OSSs) comprises communications service providers (CSPs) looking to source commercial off-the-shelf software packages and support services to address back-office processes necessary for the creation, delivery, fulfillment and assurance of services, regardless of product, service, delivery network and customer type.

Operational support processes and systems extend beyond the network and service layers. CSPs leverage OSS data to measure the impact of OSS key performance indicators (KPIs) on specific customer and business goals.

OSS Functionality

OSS core functionality includes the following subsegments:

  • Inventory and network resource management (including service inventory, order management and service catalog)
  • Provisioning and activation
  • Planning and engineering (including capacity planning)
  • Workforce management
  • Network and service assurance (performance, fault and event, and service quality management; discovery, reconciliation)

OSS adjunct functionality includes:

  • Embedded analytics, correlation and aggregation, reporting
  • Product life cycle management
  • Product catalog (as part of catalog-driven fulfillment, service orchestration)
  • Integrated logical and physical resource and asset planning

Market Spending

Because of these shifting requirements and increasing service and technology complexity, we see CSPs worldwide investing in more-flexible OSS architectures.

Overall, we expect the worldwide OSS market to grow from $29.2 billion in 2012 to $37.6 billion in 2015. Inventory is expected to grow at a compound annual growth rate (CAGR) of 5.5% through 2017. Network and service assurance (including customer experience initiatives) is expected to grow at a CAGR of 6.2%, and provisioning and activation at 5.2% worldwide (for forecast reference see the Gartner Recommended Reading section).

Market Evolution

The evolution of digital services and of convergent services composed of various technologies, as well as the need to provide more competitive personalized services (many of which consist of third-party content and components), poses complex challenges for OSSs. Traditionally, core OSSs reside in the network engineering or operations departments. However, with the shift toward IT-centric solutions, parts of OSS are housed in IT or utilized by lines of business, marketing, strategic planning and so forth. This CSP evolution necessitates single central solutions that merge fragmented processes across various organizational entities, in order to automate and expedite end-to-end fulfillment and operational processes.

Traditionally, OSSs consist of two major domains:

  • Network/service assurance encompasses all the tools and procedures intended to optimize network and service performance, which has an impact on end users' perceived quality of experience with a given CSP.
  • Service fulfillment encompasses all the actions and processes involved in implementing a service order and provisioning the service to the customer. This involves, for example, specifying the pieces of equipment and parts of the network that are needed for the service, and the allocation of bandwidth in the transport network.

These two areas are now converging as CSPs turn to strategic OSS vendors that can cover end-to-end operational processes and support them with long-term, incremental migration toward a modern OSS solution architecture. This trend is highlighted by ongoing vendor consolidation and the fact that vendors complement their solutions with niche features and functionality — such as embedded analytics, correlation and workflow capabilities.

Magic Quadrant

Figure 1. Magic Quadrant for Operations Support Systems
Figure 1.Magic Quadrant for Operations Support Systems

Source: Gartner (October 2013)

Vendor Strengths and Cautions

Alcatel-Lucent

Alcatel-Lucent's strategy in the OSS market is a service-led-solution blueprint approach that, to a large extent, is filled with preintegrated, best-of-breed partner software products blending in service expertise that spans CSPs' networks and operations. Among its key partners are Amdocs and Comptel for fulfillment, and IBM and BMC Remedy in the OSS assurance domain. Alcatel-Lucent fills solution gaps with its own specialist niche software solutions, such video analytics or cloud orchestration. Moving ahead, Alcatel-Lucent will change its positioning from a telecom vendor generalist to a specialist in certain areas — for example, service orchestration and cloud — including building on emerging software-defined networking (SDN) and network functions virtualization (NFV) technologies.

Strengths
  • Alcatel-Lucent's OSS strategy and vision focuses on innovative, emerging areas of concern for CSPs in the future, including customer experience analytics, cloud orchestration and service exposure.
  • Alcatel-Lucent places major emphasis on integrating network operations and OSSs for new technologies including Long Term Evolution (LTE), IP Multimedia Subsystem (IMS) and cloud.
  • An organizational realignment has encompassed the bundling of the OSS services, software and solutions organizations to ensure better reuse and to produce speed, quality and cost improvements.
Cautions
  • Customers would benefit from a more advanced consolidation of OSS products and functionality, and better integration of Alcatel-Lucent's own products.
  • Today, Alcatel-Lucent almost exclusively plays the role of a system integrator (SI) — integrating compulsory OSS platforms on behalf of other vendors. This might handicap the company, with CSPs looking for vendors with a single-source strategy with whom they can work as strategic partners to support their long-term evolution to drive down integration costs.

Amdocs

Amdocs is one of the largest providers of OSS and integrated revenue and customer management (IRCM) solutions worldwide. The company provides its own software in conjunction with consulting, system integration and product implementation and managed services. Amdocs' market presence revolves mainly around the OSS fulfillment domain. However, with the announced acquisition of Actix, Amdocs is expanding its offering for mobile network analytics, network optimization, planning and real-time network customer experience.

Strengths
  • Amdocs' OSS 9, an integrated part of the Amdocs CES 9 Suite — spanning OSS, business support system (BSS) and network, is a mature and stable product in constant evolution.
  • The new Business Service Capture extends the Service Order Manager product line, providing automation for the order-quote-sales cycle for the small or midsize business segment.
  • Moving ahead, the recent acquisition of Actix will represent a strong cross-sell and upsell opportunity, leveraging its footprint with mobile CSPs worldwide.
  • Amdocs can support entire CSP operator groups with aligned, single-sourcing strategies.
Cautions
  • It tends to be difficult for CSPs to estimate the overall total cost of ownership (TCO) prior to project launch.
  • Not all the required modifications in CSPs' legacy environments, which are interrelated with the Amdocs implementation, may be visible upfront.
  • Amdocs' solution partly lacks the flexibility to suit the manifold delivery requirements of CSPs' increasingly complex multivendor environments.

Clarity

This Australian independent software vendor (ISV) offers a standardized, modular, end-to-end software suite that spans the entire OSS service assurance and service fulfillment value chain. It provides a viable and cost-competitive alternative for CSPs that are looking for an agile solution with a fast implementation timetable.

Clarity provides OSS solutions to address CSPs' operational pain points and corresponding business goals with a complete solution. Delivered as transformation modules, it helps CSPs reduce costs and improve time to market.

Strengths
  • The Clarity OSS suite is based on a strong modular and unified architecture and common database across fulfillment and assurance, which enables customers to deploy the exact functionality required to meet certain business needs. The solution is characterized by a high level of standardization and out-of-the box functionality, yet it allows for necessary customization.
  • The architecturally unified solution framework helps CSPs, especially those in emerging markets and Tier 2 to Tier 3 CSPs, to reduce integration tax and monetize new market opportunities swiftly. The solution supports multiservice operations and multinetwork technologies — both legacy and next-generation network Internet Protocol (IP).
  • The company supports managed service business models for multitenancy OSS, which is of particular interest to lower-tier CSPs looking for differentiation and economies of scale.
Cautions
  • Customer service, support and service delivery are concentrated on Clarity's home markets in the Asia/Pacific region.
  • Clarity has had limited results in leveraging its success — with its fulfillment and assurance suites — in emerging markets into the mature markets of Western Europe. It has the potential to cross-sell to the existing customer base of customers through the merger with Omnix Software Solutions in the U.K. and Europe.
  • Clarity has few SI and technology partners beyond its home market.

Comarch

Comarch is a multi-industry IT business solution provider headquartered in Poland, with a particular focus on the telco vertical. Comarch provides a viable alternative to larger vendors, particularly for European CSPs. The end-to-end, preintegrated, modularized OSS/BSS suite, allows an incremental system environment evolution. This suite is based on an integrated architectural framework and has been developed from scratch — based on the latest development technologies (such as Java EE).

Strengths
  • Comarch's OSS products are highly configurable and characterized by feature-rich and out-of the box functionality, yet allow easy customization upon customer needs and interoperability with assurance and fulfillment legacy systems. The three-layer application architecture (based on the Model-View-Controller software architecture pattern) enables flexible and easy system data model changes and configuration, without requiring new custom developments.
  • Comarch has a strong product road map and vision that address key CSP initiatives to grow revenue, improve operational efficiency and customer experience — such as over-the-top, machine-to-machine (M2M) and industry verticals' service enablement and monetization mechanisms — as well as an integrated product and service catalog.
  • Comarch is seeking a strategic supplier position through incremental expansion of existing customer deals. A common competitive differentiator for European CSPs appears to be Comarch's nearshore presence and its attractive price/performance ratio.
Cautions
  • Comarch's professional services capabilities don't always meet CSPs' expectations regarding typical SI domain expertise such as implementation best practices, delivery methodologies and project leadership.
  • Comarch mostly implements its own products. However, because there are not many certified Comarch SIs, CSPs' choice of preferred SIs is limited. This might hamper Comarch's overall growth in the longer term.
  • Comarch lacks sufficient partnerships with other OSS technology, SI and software partners, which limits the integration capabilities of its third parties.

Ericsson

Ericsson has completed a number of global acquisitions in the OSS domain during the past few years, namely, Telcordia, ConceptWave, Optimi and TeleOSS Consulting, in order to build an end-to-end solution suite and strengthen its local consulting and system integration capabilities. The construct of a preintegrated, modularized OSS suite will give Ericsson a strong position in the telecom operations management systems (TOMS) global market, in conjunction with its leadership position in the wireless and LTE equipment market. The Ericsson Consulting and Systems Integration (CSI) organization often drives OSS custom projects. This provides an opportunity for existing customers to shape the evolution of technological functionality and best practices.

Strengths
  • Ericsson's OSS vision captures the most prevalent and influential trends (such as customer experience, cloud/SDN, M2M and catalog fulfilment), and matches the definition of corresponding solution and product development focus areas. However, Ericsson needs to execute swiftly to realize its full OSS market leadership potential.
  • Ericsson now possesses a very comprehensive OSS service assurance and service fulfillment portfolio, with an increasing focus on out-of-the box functionality bundled with its own products and corresponding support, consulting and system integration services.
  • Ericsson's strategy is underpinned by tackling imperative operational processes from a cohesive end-to-end perspective, taking into account corresponding business processes.
Cautions
  • Ericsson's story line needs to be fine-tuned, to become more concrete in terms of the execution of its product road map and how it addresses these future challenges.
  • The prioritization, consolidation and integration of all acquired OSS components is still a work in progress.

HP

HP's OSS portfolio centers mainly on network and service assurance, planning and engineering, provisioning and activation. A large portion of HP's overall OSS revenue, including network legacy and maintenance contracts, is derived from its network and service management business. HP has also evolved its existing OSS assets for unified customer experience assurance, which leverages OSSs holistically across the service-layer stack and front-end, customer-facing constituencies — elaborating real-time, in-memory analytics from its Autonomy acquisition.

Strengths
  • HP's TeMIP OSS product is a well-proven and robust solution. CSPs worldwide use it for multiple operational domains for technologies and services.
  • HP's network and service assurance solution is based on a strong architectural blueprint, using prebuilt adapters and integration with third-party systems.
  • HP's Solution Consulting Services (SCS) provides corresponding OSS and business transformation capabilities, including process management, architectural guidance and financial evaluation. HP provides proactive and responsive support for CSPs' requirements, leveraging HP's pool of OSS resources.
Cautions
  • HP's technical support for third-party solutions is not always as proficient as for its own solutions.
  • HP's fulfillment suite lacks maturity in terms of providing an integrated solution. HP heavily relies on, and leverages, best-of-breed ISV partner solutions, which requires integration with the overall solution architecture.

Huawei

Huawei's OSS software is embedded predominantly within its network equipment: comprising basic network and performance management, troubleshooting and provisioning. Much of Huawei's OSS revenue comes from OSS support for its own equipment. However, Huawei's new OSS multivendor business has been strategically aligned as part of its professional services organization. Huawei also provides customization and system integration services for third-party OSS ISVs (namely, HP and IBM).

Strengths
  • Huawei is positioned among the world's leading wireless and fixed technology network equipment providers (NEPs), with assets in IP and LTE that it could leverage with its OSS business. Its standing with many top CSPs could open doors and represent new growth opportunities.
  • Huawei has a strong element and network management and provisioning solution for its own network equipment, but doesn't have a holistic, preintegrated suite based on its own software assets. Huawei typically uses best-of-breed OSS as part of its solution blueprint architecture (HP and IBM for example).
  • Huawei's approach toward customer experience is services led. Two years ago, Huawei started to evolve its SmartCare customer experience management (CEM) solution road map. SmartCare manages CSPs' customer experience across network, service and application layer.
Cautions
  • Huawei lacks credibility and market awareness as a multivendor OSS player.
  • Huawei lacks some vital software assets of its own in the OSS service layer and fills these gaps with third-party products.
  • Huawei's OSS is, to a large extent, services led and based on customizations. CSPs require highly standardized, highly configurable OSS software architectures that are based on the factory-product design principles of reusability and out-of-the box functionality.

IBM

IBM provides comprehensive product and service offerings in the OSS service assurance market (especially fault and performance management) to CSPs worldwide. IBM has amalgamated its flagship products Tivoli and Netcool with numerous acquired assets to create a comprehensive end-to-end OSS assurance suite across CSPs' operational network and IT domains. Tivoli Netcool and Maximo accompany network performance and service management with adjunct fulfillment tasks, such as asset management, configuration management and provisioning. IBM has pursued numerous acquisitions and organic development initiatives to fill solution gaps in adjoining areas and to be able to better leverage its OSS footprint from end to end within its CSP constituents (for example, in the areas of product catalog, cloud, analytics, social media and digital commerce).

Strengths
  • Based on a single OSS architecture across fixed, mobile, broadband and data center environments, IBM addresses CSPs' needs for scalability, extensibility, flexibility, openness and real-time throughput, while allowing for legacy integration.
  • IBM's integrated OSS and analytics solution measures the network impact on customer experience, pulling together network, OSS, probe, call data records and handset data to allow cohesive, predictive real-time operational analysis coupled with advanced data warehousing and high-volume data processing and correlation capabilities.
  • The IBM SmartCloud orchestrator will embrace provisioning and fulfillment as well as usage monitoring and capacity management of cloud services. Future investment areas focus on an equivalent OSS for cloud network infrastructure, such as configuration, fault and performance management and service assurance in a real-time OSS environment.
Cautions
  • CSPs may consider competitive offerings that provide more integrated OSS frameworks than the loosely integrated products from IBM.
  • IBM's challenge is to fully consolidate and integrate its many acquired operations management assets for a more aligned end-to-end process support across the network, service and customer layers (for example, more consistency in network facilities management, service and customer experience monitoring).
  • CSPs may perceive IBM's OSS solutions as being monolithic and complex.

NetCracker Technology

As the independent software and solutions arm of NEC, NetCracker Technology is ranked among the fastest-growing OSS/BSS companies — based on global proficiency with CSPs of all tiers worldwide. The company provides a complete, mature service fulfillment product suite, which is based on a modern architecture and has been developed from scratch. NetCracker's origins lie in its inventory management offering — which has evolved to cover a broader set of end-to-end functionalities in the fulfillment domain — now embracing logical and physical network inventory, as well as product catalog and service inventory/service catalog, and end-to-end order management functionality. NetCracker possesses a worldwide professional services resource pool (partly available from its parent company NEC) to pursue the associated implementations, managed services and outsourcing of its own software.

Strengths
  • NetCracker provides a fully integrated, highly configurable, modular fulfillment suite, with advanced functionality and performance, that is based on a scalable architecture. The multiservice, multitechnology core OSS platform leverages architectural openness and Web-based, Java EE capabilities, which facilitates effortless customizations, supported by a transparent licensing model with no hidden costs for change requests or concurrent users.
  • NetCracker addresses systematic problems at the service layer (fulfillment, provisioning and service inventory). The service-to-resource topology enables underlying interdependencies between services and the network to be managed, which facilitates the faster rollout of complex services.
  • The company has a strong OSS product road map, placing particular emphasis on technology and architectural innovation, including approaches such as SDN/NFV and customer service innovation through open APIs. NetCracker's enterprise management solution provides centralized, end-to-end management capabilities of all operational (OSS/BSS) and corporate (finance and HR) business processes.
Cautions
  • NetCracker might experience a revenue decline after it has exhausted penetrating accounts acquired from Convergys.
  • The company needs to widen its system integration and ISV partnership network to meet CSPs' evolving needs for multivendor technology services.
  • CSPs expect professional services resources that are more scalable, to meet evolving project needs.

Nokia Siemens Networks

Nokia Siemens Networks' flagship product NetAct is one of the most technically mature OSS suites in the market. The key OSS components include performance, service quality management, configuration, IP assurance and fault management preintegrated with the trouble ticketing solution BMC Remedy. It is a seamlessly integrated, feature-rich multiservice and multivendor service assurance umbrella solution that is based on an open and flexible architecture and extensive off-the-shelf, plug-and-play content packs.

NetAct also provides the foundation for Nokia Siemens Networks' overall CEM product portfolio, which encompasses the intelligence for proactively monitoring and managing end-user interactions and the customer experience across all three dimensions — network, service quality, and device and customer actions.

Strengths
  • Supported by the Nokia Siemens Networks global services organization, CSPs can leverage the solution as a transformation tool that enables consolidation and modernization of end-to-end operational service assurance and fulfillment legacy environments, encompassing network and service layers. On the fulfillment side, the company frequently integrates Comptel's best-of-breed, catalog-driven inventory solution.
  • Nokia Siemens Networks is executing well on the CEM aspect of the OSS, which focuses on managing customers' perceived quality of experience, from end to end, through the real-time correlation of commercial and technical KPIs across the network, service and customer-facing layers. CEM on demand provides corresponding analytics and reporting capabilities, which allows CSPs to trigger operational actions.
  • The company's road map provides tailored multivendor operations support solutions for mobile broadband, HetNet, 4G/LTE self-organizing networks (SON), SDN and NFV.
  • Customers benefit from continuous investment in related functionality, such as iSON, multivendor assurance and workflow engines, to ensure seamless integration between customer experience, service and network management.
Cautions
  • CSPs should insist on an international transfer of project management skills and the pooling of knowledge and expertise, in order to complement local customer service support and project management, if required.
  • Nokia Siemens Networks' pricing and licensing strategy sometimes appears out of sync with global CSP requirements, especially regarding timely responses to pricing quotes for new solutions.

Oracle

Oracle's telco solution division has built a significant OSS presence based on its own software developments and strategic acquisitions. The main pillars of its OSS strategy center on service catalog, end-to-end order management and service and network inventory, as well as service activation capabilities. The recent acquisition of Acme Packet will help Oracle to further strengthen its strategy and position in the global OSS market, by accompanying its core fulfillment assets with network optimization, capacity and service assurance and IP management capabilities.

Oracle continues to evolve, streamline and integrate its OSS/BSS solutions portfolio to provide a more comprehensive software suite; extended by holistic analytics and customer experience capabilities, as well reusable fulfillment patterns anchored on catalog entities.

Strengths
  • Oracle provides highly productized and preintegrated OSS application modules in the form of an agile service framework that allows rapid configuration and time to market. The best-of-breed solution is based on a strong architectural foundation and a common design blueprint, enabling design pattern and component reuse.
  • The company's road map addresses the market evolution toward more standardized, out-of-the box product functionality, to help CSPs drive down integration costs and eliminate customization efforts. Interfaces and adapters help to speed up implementation time and enable integration with legacy environments.
  • Oracle Communications Consulting has developed a number of implementation packs and accelerators, to speed the delivery of projects by providing standardized reference implementation tools and business process best practices. Moreover, customers can leverage insights and experience from a large number of customers worldwide.
  • Oracle has an effective sales and marketing strategy and execution that focuses on cross-selling and upselling to extend its OSS offerings to existing Oracle customers — either directly or through global sales channels and partners.
Cautions
  • The Oracle Application Integration Architecture (AIA) for Communications must further mature in order to ease integration between Oracle products. Upgrades from prior software versions need to become easier in conjunction with AIA.
  • Customization capabilities on a UI level still require improvements to enhance usability.
  • There is a risk of additional project customization by partners, which might enhance costs.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

No vendors have been added.

Dropped

No vendors have been dropped.

Inclusion and Exclusion Criteria

Vendors included in this Magic Quadrant are those that offer multiservice and multitechnology, end-to-end solutions to the global market. These companies are ranked among the top 10 vendors featured in our annual TOMS market share report (see the Gartner Recommended Reading section). We also include smaller vendors (in revenue terms) that offer agile and comprehensive end-to-end fulfillment and assurance solutions and, as such, have a significant impact on the market and represent a viable sourcing alternative to the market share leaders.

Inclusion Criteria

  • Solution vendors: We include software and service vendors with their own software suites that earn significant revenue from both software and services related to this software. NEPs with extensive OSS product portfolios are also included in this category.
  • Functionality: The software suite has to provide the full range of OSS functions; in either the service assurance or service fulfillment areas, or both.
  • Market impact: We include the market share leaders, as well as smaller or midsize players that have a significant impact on the market. These vendors offer complete, preintegrated suites spanning service fulfillment (inventory, product/service catalog, order management) and service assurance (performance, fault and event management, and service management).

Exclusion Criteria

  • SIs that do not have their own software suites are excluded.
  • This report covers only multitechnology and multiservices solutions. Those that address only cable providers or ISPs are excluded.

Evaluation Criteria

Ability to Execute

Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods or procedures that enable them to be competitive, efficient and effective, and that positively impact revenue, retention and reputation. Ultimately, technology providers are judged on their ability and success in capitalizing on their vision.

Table 1. Ability to Execute Evaluation Criteria

Criteria

Weight

Product or Service

High

Overall Viability

Medium

Sales Execution/Pricing

Medium

Market Responsiveness/Record

High

Marketing Execution

Medium

Customer Experience

Not Rated

Operations

Not Rated

Source: Gartner (October 2013)

Completeness of Vision

Gartner analysts evaluate technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well they map to the Gartner position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunities.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

Not Rated

Marketing Strategy

Medium

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

Not Rated

Vertical/Industry Strategy

Not Rated

Innovation

High

Geographic Strategy

High

Source: Gartner (October 2013)

Quadrant Descriptions

Leaders

Leaders in this market have strong market presence and significant market share (most of them globally). All leading vendors portrayed in this Magic Quadrant have a comprehensive OSS offering and would still be Leaders even if they needed partners.

  • They offer comprehensive, preintegrated, modularized TOMS suites.
  • They have also ventured into adjacent markets, such as BSSs, service delivery platforms (SDPs), CRM and analytics.

Leaders are well positioned with their current product and service portfolios and their strategies. They have a coherent vision that anticipates current and future requirements. Leaders may not offer the best solution for every type of CSP, depending on their business models and maturity. However, they have proven viability of implementation and can achieve and sustain high-quality, best-of-breed and low-risk deployments.

Challengers

Challengers are technology providers with strong execution capabilities and high-quality products and services.

  • Challengers execute well, for the most part, and dominate large segments of the market.
  • They do not, as yet, fully exploit and address the future potential of the market.
  • The breadth and depth of their products does not match the capabilities of the Leaders in this market.
  • Their vision is not as clear, and their strategy is not as compelling as those of the Leaders.
  • Their overall solutions still have some gaps and do not quite have the same level of feature and functionality advancement and innovation as those of the Leaders.

Visionaries

Visionaries have put together a compelling OSS strategy, in anticipation of CSPs' key pain points in the future, which details how to address those pain points with innovative OSS products and services.

  • Visionaries demonstrate a clear market understanding.
  • However, they still lack certain skills in the area of execution that would enable them to move into a leadership position.
  • It is also possible that CSPs are not yet ready, from a technology perspective, to fully embrace these vendors' futuristic vision and thereby allow them to execute at a leadership level.

The main characteristic of vendors in the Visionaries quadrant is that they are neither as stable as the Leaders, nor are their execution capabilities as advanced.

Visionaries are usually in a state of transition; some are about to move into a leadership position once they improve in one key area — such as beefing up their critical product or service capabilities. A more stable state could be achieved by gaining market strength and scale, or simply by achieving wider adoption of their solution in the market.

Niche Players

The vendors in this quadrant offer products and services that cover a subset of functionality or focus mainly on a certain geography.

  • They usually lack a well-defined strategy and a compelling vision for the future.
  • They are unfocused and do not out-innovate or outperform other vendors.

To progress in the Magic Quadrant, Niche Players need to fill vital solution gaps, find preintegrating partners in other geographies, or build up their own service capabilities.

Context

The OSS market has matured throughout the years to the extent that numerous vendors offer preintegrated, modularized, out-of-the-box product functionality with an increasing level of standardization and less customization. CSPs' requirements shift toward highly configurable OSS platforms that support multiple network technologies and manifold emerging services.

Typically, CSPs have heterogeneous OSS environments, including a myriad of legacy solutions. As CSPs shortlist suppliers they need to take into account many commitments when investing in OSSs (in terms of architectural evolution, expected ROI and the buy-in of numerous business and technical stakeholders). Moreover, as CSPs narrow down their overall list of strategic suppliers they look ahead to, ideally, working with one strategic OSS vendor for service assurance and fulfillment that may even possesses the proficiency to tackle holistic OSS/BSS/SDP and CRM operational processes. They expect their trusted partners to engage with multivendor technology expertise that is more than sufficient to overcome any challenges related to the integration with existing legacy OSSs (for example, how to operate interfaces).

The vendor landscape reflects changing OSS investment patterns. We observe ongoing industry consolidation through mergers and acquisitions. Moreover, in an endeavor to provide more holistic and comprehensive solutions, vendors fill solution gaps with specialist software such as embedded analytics, correlation and aggregation, geospatial representation or discovery and reconciliation. These dynamics are set to enable the transformation of major operational value chains and to enable new services and technologies evolving around the following key priorities:

  • Improve operational efficiency for the design, implementation and assurance of new, composite and digital services — many of them involving third parties.
  • Drive down operating expenditure (opex) and capital expenditure for convergent, multitechnology and personalized services. The challenge is to overcome operational legacy silos and efficiently orchestrate services across different business verticals.
  • Ensure customer loyalty and deliver a superior customer experience. OSS service assurance plays a vital role here. However, operational network and service data needs to be mapped to the customer-facing systems to manage customer impact more holistically and ensure service continuity.

Core OSS products, and the technology itself, tend to become increasingly commoditized. More holistic architectural systems and greater business process versatility is important. CSPs realize that significant modernization of their entire OSS stack is indispensable in the light of new business models and technology investments in LTE, SON, IP and fiber, as well as convergent third-party and value-added service chains. Differentiation is also achieved through transformational leadership and new delivery models, such software as a service, platform as a service and cloud.

Lower-tier CSPs in particular are starting to build business cases for alternative hosted cloud and managed services, providing multitenancy OSS and adjacent BSS application administration amid the desired reduction in opex.

Changes Since Last Year's Magic Quadrant

We have adjusted the inclusion criteria, weight and evaluation criteria to account for changes in the OSS market. Highlights are as follows:

  • Evaluation criteria:
    • Completeness of Vision: Innovation:
      • We added this criterion to Completeness of Vision: This is to attribute to vendors their capability to address technology, architecture and customer service innovation.
  • Evaluation criteria:
    • Ability to Execute: Marketing Execution:
      • We added this criterion as a sub-criterion to Ability to Execute: This is to capture vendors' success in executing on their marketing strategy.
  • Weights:
    • Completeness of Vision: Marketing Strategy:
      • We reduced this weighting from "high" to "medium," because for most vendors in the Magic Quadrant marketing execution is as important as consistent messaging.

Recommendations for CSPs

CSPs should evaluate strategic OSS partners based on following mix of OSS solution capabilities, skills expertise and resources:

  • Best-in-class, out-of-the box, modularized, preintegrated product suites.
  • Centralized, fully integrated core OSS platform based on a modular, flexible and open architecture that allows future evolution allied with that of the CSP.
  • Technology and content packs based on business best practices, to ease integration efforts and speed up time to market.
  • Reference projects to support new technologies and services, such as digital value-added-services, also including appropriate out-of-the-box device- and technology-specific data models. Maintaining a set of roll-out processes is imperative to facilitate quick network rollouts (such as for new LTE, mobile and B2B technologies).
  • Make sure the vendor has a widespread library of the appropriate technology- and vendor-specific OSS adapters (for example, for discovery, reconciliation and activation).
  • Leadership in the areas of business consulting, service design and integration; and implementation and business process best practices in conjunction with OSS environments.
  • Standardized configuration and easy, flexible customization capabilities (for example, Java EE interfaces).
  • Adequate expertise to manage interfaces and integration with adjacent legacy TOMS.

Market Overview

Competitive pressure causes CSPs to leverage OSSs as strategic tools to provide customer differentiation in terms of the quality perceived by customers and the speed of services. Instead of previous "big band" projects, CSPs worldwide tend to make rather incremental improvements to their fulfillment and assurance processes.

Today, OSS infrastructures have to enable convergent services across different technologies and network environments, such as fixed, mobile, broadband, LTE, IMS, IP and cloud. CSPs need to become more effective in the fulfillment and assurance of complex composite service bundles across various technologies — and involving multiple third parties — to be delivered across various channels. Technology convergence requires more holistic and proactive OSSs (for example, providing a network and service topology view that enables cohesive correlation between network technology and services). Solutions need to become more metadata-driven, providing a centralized, correlated view across network, service quality and customer dimensions. As a result, CSPs tend to exhibit careful judgment regarding OSS investments, often involving C-level officers whose decisions are usually based on proven ROI.

Move Toward End-to-End Architectures

New converged and composite services are becoming more complex, and are often made up of telco networks and IT as well as third-party content. This situation imposes the need for greater operational agility for the rollout of new services, and requires an end-to-end operational process view. Simultaneously, CSPs continue to experience difficulties in the complex administration of heterogeneous OSSs that are purchased from various vendors and organized into silos throughout their entire operations. This situation inhibits the fast deployment of new products and services, while failing to ensure the integrity and consistency of data across redundant solutions.

This need for greater operational efficiency to fulfill and assure services implies a shift toward more congruent business- and process-driven end-to-end OSS solutions, through which data is leveraged simultaneously across commercial and technical constituents in the CSP enterprise. Moreover, CSPs expect vendor expertise in adjacent areas, such as CRM, BSSs, CEM and SDPs. As a consequence of this end-to-end evolution, CSPs need to take the lead in defining their own end-to-end architecture and position vendors within that framework.

Best-of-Suite Platform Approach

In today's marketplace, CSPs are facing enormous pressure to reduce product integration costs and TCO. Consequently, CSPs are shifting their investments from a traditionally siloed environment toward a single, centralized platform to cope with the increasing complexity of service delivery. Thus, the market is clearly moving toward preintegrated best-of-suite products based on one unified platform. This comprises a unified business model and business rules environment, as well unified UIs. In order to expedite OSS process automation and service fulfillment, some vendors provide business, content and technology packs that speed up specific implementations — such as SON, LTE, Multiprotocol Label Switching or IP VPN. This also involves support regarding the design of business processes and implementation best practices.

CEM Embraces OSS

We also see a major revitalization around service quality management and the corresponding network performance and capacity planning. CSPs now utilize critical insights from these OSSs, through corresponding analytics and data correlation, as part of wider customer experience initiatives. Previously, OSS data was used for isolated technical evaluation: looking at operational KPIs independently of the customer-centric view. Now, CSPs realize the need to transform and amend their OSS environments, in alignment with customer and business requirements, in order to make an impact in terms of financial metrics.

The service delivery chain for new and complex services, which often include third-party KPIs, requires an extended view across network resources, service quality and customer interaction. Moreover, CSPs need to capture information from clients sitting on devices, probes, external SLAs and information from social media or advertising sites.

Increasing Complexity of Managing New Technologies and Services

The complexity of technology and service bundles is ever increasing. For CSPs one of the key pain points is to assemble and offer those services rapidly to market, as well as the ability to bundle new and existing services (for example, IPTV and broadband or cloud and networking). This also includes the need for streamlined and error-free delivery-of-service orders across network and IT domains, potentially leveraging existing inventory and/or activation investments. Often, the inflexibility of existing systems and the fragmented OSS landscape impose delays on time-to-market; hence the need for:

  • Synchronizing and optimizing processes for product/service creation, provisioning and activation
  • Correlating services and resources for quick resource (re)allocation
  • Integrating multiple, multivendor and, often, legacy systems

Market Structure

As a consequence of the end-to-end evolution in the market, we can see a strong trend toward greater market concentration. This trend will be sustained and motivated (especially) by larger companies picking up smaller point solution players to complete their end-to-end solutions. The market consists of a few large global vendors that offer end-to-end TOMS solutions and a number of smaller vendors that offer highly specialized point solutions and products. At the same time, we see vibrant startup activity and emerging smaller vendors addressing the newer, more specialized solution needs of CSPs in the context of managing new operational complexities. Niche vendors frequently fill the market gaps left by established vendors in, for example, order management, workflow management, VoIP service assurance, product life cycle management, catalog-driven fulfillment and product catalog management.

Acronym Key and Glossary Terms

BSS business support system
CAGR compound annual growth rate
CEM customer experience management
CSP communications service provider
IMS IP Multimedia Subsystem
IRCM integrated revenue and customer management
ISV independent software vendor
KPI key performance indicator
LTE Long Term Evolution
M2M machine-to-machine
NEP network equipment provider
NFV network functions virtualization
OSS operations support system
SDN software-defined networking
SDP service delivery platform
SI system integrator
SON self-organizing network
SQM service quality management
TCO total cost of ownership
TOMS telecom operations management system

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.