Analyst(s):Martina Kurth, Amresh Nandan
This Magic Quadrant rates major vendors that sell end-to-end OSSs to communications service providers in the global marketplace. Modern OSS becomes a critical incubator that enables CSPs to shift from traditional operations providers to digital service providers.
This document was revised on 15 March 2018. For more information, see the Corrections page on gartner.com.
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. These processes are necessary for the creation, delivery, fulfillment and assurance of services, regardless of product/service, delivery network technology and channel, and customer type.
The OSS encompasses primarily network and service abstraction layers, which instantiate customer-facing processes through a set of integrated solutions. The OSS helps to improve operational efficiency, drive down costs and improve customer experience through a higher level of automated operational intelligence that drives business outcomes.
Traditionally, core OSSs reside in the network engineering or operations departments (that is, within the vicinity of the CTO). However, with the shift toward IT-centric solutions, OSSs are also housed inside IT within the vicinity of the CIO. OSS data is of strategic importance to link operational technical planning with the customer data and, hence, is used by lines of business, marketing and strategic planners.
OSS is traditionally categorized into 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. Service fulfillment involves, for example, specifying the pieces of equipment and parts of the network that are needed for the service, along with the allocation of bandwidth in the transport network.
However, the two major OSS domains outlined above — assurance and fulfillment — 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, automated business processes, and correlation and workflow capabilities.
The ongoing current evolution toward digital infrastructure operations paves the way to the next big evolution in the industry: a fully automated, highly configurable, self-orchestrating horizontal software layer that supports hybrid physical and virtual resources. Over time, this new software-defined networking (SDN)-/network function virtualization (NFV)-driven OSS execution layer (OSS orchestration) will replace current service layers.
Leading vendors in this Magic Quadrant cover both the traditional OSS and the new OSS orchestration architectures in the form of SDN/NFV orchestration solution capabilities. The underlying functionality will be the same for both worlds, as outlined below. However, architectures will shift from vertical solution stacks — often purpose-tailored to specific technologies — to horizontal, fully integrated OSS functionality. The new OSS orchestration will encompass the same functionality as outlined below, encapsulated in preintegrated, real-time, self-configurable, metadata-driven architectures.
OSS core functionality includes the following subsegments
Fulfillment/provisioning and activation
Network and service assurance
Planning and engineering
OSS adjunct functionality includes:
Product/service catalog and product life cycle management
Analytics, correlation, aggregation and reporting
This Magic Quadrant also evaluates OSS vendors' capabilities to support new OSS orchestration and execution capabilities that amalgamate OSS capabilities listed above in a new horizontally integrated architecture. This new architecture will sustain closed-loop operations that will support evolving virtualized and hybrid network environments.
Magic Quadrants provide a snapshot in time based on a specific set of evaluation criteria and corresponding weights.
Gartner advises readers not to compare this year's placements of vendors with those of previous years because:
The market is changing, and the criteria for selecting and ranking vendors continue to evolve.
Scores are relative, rather than absolute, reflecting the advancement of all vendor solutions' Completeness of Vision and Ability to Execute.
Gartner advises CSP CIOs and CTOs against simply selecting vendors that appear in the Leaders quadrant because:
All selections should be buyer-specific.
Vendors from the Challengers, Niche Players or Visionaries quadrants may be better matches for these CSPs' business goals and solution requirements.
The sliders in the interactive Magic Quadrants allow decision makers to adjust the evaluation criteria according to their preferences.
The current OSS market evolution is driven primarily by CSPs' transition to establish themselves as digital service providers from a business and operational perspective. The new digital service provider has to manage complexity beyond traditional network-based CSP business models, such as digital and composite business models, as well as physical and cloud-based service delivery. Digital business models pose manifold requirements on the technical and architectural functionality of OSSs that the vendors portrayed in this Magic Quadrant have to cater to. New digital business models require configuration, fulfillment and assurance of service in real time. Multiple traditional communications service, virtual, software and external web-based digital content service components must be composed or mashed together into product or service bundles. These models also need to provide more competitive personalized services (many of which consist of third-party digital content and components), as well as need to manage adequate customer experience across the end-to-end internal and external system environment.
Currently, we see two major CSP focus areas of digital infrastructure investments:
Modernization of the front-end customer-facing IT stack
Initial investments in network-facing technologies, primarily virtualized SDN and NFV management and orchestration solutions
OSS solutions depicted in this Magic Quadrant are spanning service-facing digital IT solutions that are tightly coupled with customer-facing IT. Without an adequate process alignment, CSPs will fail to monetize investments on the back end.
In the digital world, CSPs must ensure that network-facing infrastructure software — OSS stacks — fully interoperate and integrate with the customer-facing business support system (BSS)/CRM stack to manage affiliated business and system processes end to end. The lines between OSS, BSS and CRM are blurring, and CSPs will source end-to-end solutions comprising various components within these domains.
During the next five years, we will see the emergence of a new virtualized OSS execution domain. The uptake of SDN/NFV enforces the trend toward unified OSS orchestration infrastructures, spanning holistic closed-loop operations that encompass fulfillment, assurance, policy and analytics, as CSPs venture into hybrid virtualized and software-driven network environments and corresponding business models.
Source: Gartner (February 2018)
Amdocs is a publicly traded global software provider and system integrator for CSPs. Branded as Amdocs customer experience systems (CES), it is providing end-to-end OSS, BSS, network planning and operations, analytics, Internet of Things (IoT), and media solutions for CSPs.
Amdocs is one of the largest pure-play OSS/BSS providers worldwide, addressing CSPs' evolving need to manage the customer experience holistically across the network, IT, customer and device layers, supporting physical and virtual infrastructures. Amdocs OSS 10, an integrated part of the Amdocs CES 10 suite (spanning across OSS, BSS and the network), is a mature and stable product. Amdocs is positioned among the first industry players to build a full-stack SDN/NFV-driven software life cycle management reference architecture to be leveraged through the wider open standards industry initiatives (such as Open Network Automation Platform [ONAP]). The company provides consulting, system integration, product implementation and managed services in conjunction with its own software.
Amdocs is one of the innovators in the industry advocating the shift from proprietary vendor solutions to open-source-driven OSS/BSS software development and corresponding agile tools, for cloud-based, core telco infrastructures.
Amdocs has co-developed AT&T's reference architecture — ECOMP (or Enhanced Control, Orchestration, Management and Policy) platform — consisting of eight architectural pillars to facilitate the creation, design, delivery, deployment and life cycle of virtualized services across hybrid physical and virtual environments. ECOMP is made available through ONAP and is supported by Linux to the wider industry.
Amdocs has a proven track record for the redesign of complex, heterogeneous legacy OSS environments, making it a strategic supplier for CSP digital technology transformation initiatives.
Amdocs prefers to offer solutions and services itself as compared with partnering with other system integrators. This may not be a strategic fit for some CSPs.
CSP clients may observe challenges to provide an upfront estimate for the overall total cost of ownership (TCO) prior to a project launch.
In line with the significant business model shift that Amdocs is undergoing, CSPs need to demand support for the fully integrated creation, design, testing and integration of DevOps processes across supplier and customer resource boundaries.
Comarch is a multi-industry IT business solution provider, with a modularized, fully preintegrated, end-to-end OSS/BSS suite that is based on a modern architecture developed from scratch. Comarch pursues an aggressive organic global growth strategy to expand its global service delivery capabilities within multinational CSP groups worldwide. As one of the Challengers in this market, Comarch is driving CSPs' operational evolution of hybrid physical and virtual network infrastructures and data centers. The goal is to leverage its competitive price/performance ratio and domain expertise into other regions. Comarch is a viable alternative to the Leaders in this Magic Quadrant.
Comarch's OSS products are characterized by feature-rich, highly configurable and out-of-the-box functionality tailored to support technology evolution operations requirements, such as 5G and IoT.
Comarch is investing in R&D for intelligent operational technologies, such as machine-learning algorithms, predictive analytics and artificial intelligence, to bolster utilization of new digital services (for example, virtual and augmented reality).
Strong delivery capabilities and a good customer track record are among Comarch's key strengths. These strengths are reflected in the quick turnaround and responsiveness to CSP requirements, especially across multiple CSP groups.
Comarch is still evolving its next-generation architectures, including cloud-enabled core software products, based on new DevOps-driven and open-source development and deployment models. Comarch has yet to shift its business model and positioning in the market accordingly.
Customers expect Comarch to take more of a leadership role in the industry. Customers expect Comarch to address their emerging technology pain points, as well as help them to operationalize these technologies.
Comarch lacks an adequate global, certified system integrator partnership network, which may hamper its ambitious global expansion strategy.
Ericsson has one of the most comprehensive, preintegrated, modularized OSS suites in the industry. Its broader OSS/BSS portfolio provides puts Ericsson in the position as a strategic partner for CSPs' digital infrastructure transformation needs spanning network, service and customer-facing layers.
Catalog-driven OSS has become the heart of most of Ericsson's solution offerings. It positions OSS to extend CSPs' capabilities to enterprises, and the machine-to-machine (M2M) and IoT platform business, in the areas of utilities and transport.
As one of the few full-telco cloud stack vendors, Ericsson addresses end-to-end operational SDN/NFV requirements of CSPs across hardware, software and services. Ericsson's new horizontal OSS orchestration architectures facilitate closed-loop, agile digital operations.
Ericsson has delivered proof points on the execution of large-scale, complex end-to-end OSS/BSS transformation project needs, supported by its professional services, software and network resources. This represents critical competitive differentiation from the technology, people and process perspectives.
Ericsson has a clear product roadmap that addresses key industry challenges, such as IoT, cloud, end-to-end management and orchestration for hybrid networks, and zero touch/automation, by leveraging machine learning, as well as enabling digital service and connected device ecosystems. Particular emphasis is placed on the convergence of network and IT.
As one of the few full-stack telco cloud vendors, Ericsson has delivered execution proof points in terms of OSS orchestration and network management implementations. Ericsson is well-positioned in this embryonic market, supporting early mover CSPs' evolving transformation needs with complex hybrid physical and virtual networks.
One of the most mature solutions in the industry, Ericsson's big data analytics platform helps CSPs to leverage existing OSS/BSS infrastructures. The platform provides predictive analytics and machine-learning algorithms that drive decision support and automated action — for end-to-end business, IT and network use cases.
Ericsson is facing challenges to orchestrate global product and service resources, as well as to deliver best practices effectively and with a short lead time to respective clients on a local basis. Thus, customer delivery and support may vary from region to region.
CSPs are required to involve multiple stakeholders across CIOs/CTOs, as well as lines of business, to extract maximum value of Ericsson's Digital Services portfolio from an end-to-end digital business transformation perspective.
Considering Ericsson's forefront position as a single-sourcing SDN/NFV ecosystem provider, Ericsson still operates like a traditional network equipment provider (NEP), rather than as an IT provider that uses agile operations and service development methodologies.
Hewlett Packard Enterprise (HPE) is a global IT player. It leverages its combined telco network and IT enterprise expertise that is coupled with a cloud-centric positioning in the OSS market. HPE's OSS portfolio amalgamates fulfillment, assurance, analytics, planning and engineering products. In the network and service assurance domain, HPE's network and assurance offering, with embedded real-time, in-memory analytics and correlation capabilities, supports CSPs' holistic customer experience initiatives.
HPE has improved its positioning regarding closed-loop OSS orchestration capabilities to support CSPs' prevailing virtualization initiatives. In the SDN/NFV domain, its flagship products — the NFV Director (network resource abstraction) and the HPE Service Director (OSS orchestrator) — enjoy strong traction among CSPs worldwide. HPE continues to drive the evolution of Service Director to help CSPs innovate their OSS toward bimodal service delivery agility in terms of flexibility, speed and quality.
The HPE OpenNFV reference architecture provides an architectural ecosystem covering physical servers, storage and networking, virtualization, controllers for SDN, and NFV orchestration.
HPE takes a leadership position to address CSPs' "telco out-of-the-box" requirements for full network virtualization capabilities, enabling CSPs to tap into the innovation potential related to the introduction of SDN/NFV based on preintegrated solutions and methodologies.
HPE enables an end-to-end customer experience, allowing CSPs to leverage OSS assurance data into commercial customer-facing constituents, such as customer care. Single-system technical and commercial interfaces, as well as ability of customer care agents to trigger the resolution of a back-office problem, provide innovation.
HPE's Agile Service Operations Factory encapsulates technical network and service layer capabilities. This solution provides a dynamic service production environment for fulfillment and assurance across hybrid physical and virtual network function (VNF)-based services, leveraging an intent-based modeling paradigm that provides competitive differentiation.
HPE's hyperscale architecture ensures compatibility within its own holistic, out-of-the box telco cloud assets (including network and service orchestration). However, HPE does not interoperate with other heterogeneous, hybrid multivendor SDN/NFV environments.
CSPs should request that HPE commit to an unambiguous roadmap that lays out critical features, such as agile operations support, configurability and open-source support of its OSS products.
After the spinoff of HPE's Enterprise Services business, HPE's OSS clients may perceive challenges to orchestrate different product and service resources across the different operating companies. This situation may hamper HPE's capability to act as unified OSS software and service provider.
Huawei has consolidated its OSS-related products and efforts into a platform approach called Infrastructure Enabling System (IES) over the past two years. With IES, Huawei has been focusing on cloud opportunities, OSS-as-a-service opportunities and operations management modernization initiatives as a result of NFV/SDN implementations.
Huawei has been investing in its unified solutions for telco cloud-native support. It is also contributing to ONAP (driven by key CSPs, such as AT&T, Deutsche Telekom [DT] and Orange). ONAP is one of the open-source NFV reference architectures in the industry.
Huawei continues to expand its geographical footprint, while supporting a wider variety of use cases, such as IoT in China. Huawei has also expanded its consulting and system integration partner ecosystem; however, its partner ecosystem continues to be limited. Huawei prefers doing system integration and managed services wherever it can.
Huawei has increased its mind share on future telco architecture and transformation approaches among some leading CSPs, with increased penetration in Tier 1 CSPs in Europe and Latin America.
Huawei continues to invest in its IES portfolio through in-house R&D, as well as participation in industry forums, focusing on future operating models involving cloud and IoT.
With focus on transformation to agile and intelligent operations, Huawei has increased its investments in operations management capabilities called "software defined operations."
CSPs with a significant legacy OSS landscape need to perform granular due diligence into Huawei's approach to the transformation and support of multivendor legacy systems.
Huawei's roadmap of cloud enablement and future operations architecture doesn't clarify specific functional support over a specified timeline. CSPs need to understand this while engaging with Huawei.
Huawei's experience of innovative project implementations in China may not be of direct use elsewhere because of the ecosystem, local customer and business preferences, and regulatory nuances.
IBM has a large installed base in CSPs with its Netcool Operations Insight (NOI) products, primarily focused on service assurance requirements. With its wider focus on analytics, IBM has been augmenting NOI products with advanced analytics, advanced predictive analytics and machine-learning functionalities.
With Agile Service Manager, IBM is expanding its scope of products and services in hybrid and virtualized network operations management. However, its modernization of OSS products supporting hybrid networks — through its Agile Service Manager — came into public domain fairly recently (Phase 1 was launched in the second quarter of 2017). Advancement of this module is a work in progress, with life cycle management functionalities expected by the end of the fourth quarter of 2017.
IBM has a strong partner ecosystem and support structure with implementation and support partners worldwide.
IBM's IT cloud management capabilities complement well its OSS and network operations management capabilities for CSPs' network-IT integration and cloud programs.
With focus on advanced analytics capabilities and deep experience of CSP operations management, IBM offers promising operations capabilities.
IBM's infrastructure, application and network offerings portfolio allows the company to provide competitive TCO to CSPs in large transformation programs, as compared with some of its competitors.
IBM's offering and relevant experience for network cloud orchestration are still evolving with initial customer proof points. CSPs considering OSS modernization for network cloud should analyze IBM's readiness.
IBM's product support for agile and automated service operations in hybrid networks is fairly new and still developing. CSPs should analyze the roadmap, feature compliance and integration support with other products.
IBM's partnerships with VNF vendors are still evolving, and therefore, extra work may be required to develop standardized VNF life cycle management.
As NEC's independent software and solution arm, Netcracker provides a complete, mature service fulfillment and assurance product suite, which is based on a modern, highly configurable solution architecture that has been developed from scratch. Netcracker 12 is driven by continuous, solid R&D investments that put Netcracker in an industry forefront position as a cloud-native and microservice-based OSS platform provider.
Netcracker addresses the particular needs of CSPs that are looking to transform existing legacy network inventory, catalog-driven fulfillment, assurance analytics and customer-facing functionality as part of new virtualized and native digital infrastructures. Clients looking for a strategic global transformation partner to support their shift toward a digital service provider will benefit from Netcracker providing strong business and customer-facing IT solutions, which will help CSPs to monetize operational infrastructure investments, such as SDN/NFV.
Netcracker offers a worldwide professional services resource pool (partly available from NEC, its parent company) that enables it to pursue the associated implementations, managed services and outsourcing of its own software.
Netcracker is one of the innovators in the OSS market. Its visionary leadership and global industry best practices provide strong competitive differentiation.
Netcracker has among the strongest global track records, in terms of helping CSPs to operationalize and monetize incremental investments in the incipient markets of SDN and NFV.
The company addresses all system requirements, and operational and business process functions specific to a telco CSP's technology.
Clients ask for an additional choice in terms of system integration and consulting services for Netcracker OSS software. As of today, Netcracker has a limited global service partnership network to meet CSPs' evolving needs for multivendor technology services.
Early adopter clients for Netcracker's orchestration solution must invest in resources not only to support continuous creation, integration, testing and deployment of virtualized services, but also to fully leverage their technology investments.
CSPs advocate openness and high levels of system configuration flexibility in current RFPs. High customizations and accompanying development requirements may add to the complexity to manage the TCO of the Netcracker solution.
Nokia has a host of OSS products catering to various fulfillment and assurance requirements, as well as targeting specific types of networks. Nokia combines these products into a broad portfolio of Nokia Digital Operations. With NFV/SDN implementation, Nokia has further expanded its portfolio with several solutions for infrastructure and service operations management.
With Nokia's acquisition of Comptel in June 2017, OSS integration of the two companies is underway. It has limited product implementation partners and relies largely on its own service capabilities.
Nokia also offers OSS as a Service and helps customers create cloud data centers through its U.K.-based cloud design center. The Cloud Service Factory is enabling the delivery of managed cloud services (infrastructure as a service (IaaS), platform as a service [PaaS], SaaS and network as a service [NaaS]) for virtualized network products from Nokia (including OSS applications).
Nokia's broad portfolio covers a wide range of CSP requirements, including service fulfilment, analytics, device management, network performance, service quality management and customer experience management.
With acquisitions of several products, Nokia has expanded into managing the transformation of NFV/SDN and service management.
With several global delivery centers and a large service workforce, Nokia continues to engage with CSPs globally across developed and emerging markets. Reference customers surveyed for this research appreciate its flexibility in engagement.
Nokia has completed its long-term product strategy planning following its acquisition of Comptel. In light of this event, CSPs should understand the roadmap of various products and modules during the engagement process.
With more than 20 OSS products, Nokia has a varied set of components. CSPs with large-scale transformation requirements need to do due diligence of Nokia's integration approach and performance attributes.
Based on customer feedback, there is an expectation for Nokia to improve its support services.
Oracle has built a significant OSS presence based on its own software developments and strategic acquisitions. Oracle expanded its global OSS market position, by supplementing its core fulfillment assets with network optimization, capacity and intellectual property (IP) assurance capabilities.
The main pillars of its OSS strategy center on service catalog, end-to-end order management and service inventory, as well as assurance capabilities. This strategy leverages cross-industry customer experience (CX) and analytics solutions into the telco vertical that is supported by a telco-specific data model. Oracle is driving CSPs' anticipated shift toward cloud delivery models in the OSS, BSS and CRM domains. The company is pursuing significant R&D investments to rearchitect its entire telco stack — from on-premises to cloud. Moreover, the shift toward Integration Cloud Services will speed up the ease, and drive down the costs, of integration.
Oracle's OSS portfolio addresses network and service orchestration, which addresses resource, catalog and order management for virtualized and software-driven networks. The latest product developments focus on B2B NaaS and orchestration of virtualized and hybrid environments.
Oracle has further innovated its portfolio, providing a new service and network orchestration architecture. This new architecture provides management support for CSPs that are facing challenges around the evolution toward hybrid physical and virtual environments.
Oracle's consulting division has taken the prime role in a number of large deployments, using a solution-driven design approach with strong program governance. It has also leveraged standardized reference implementation tools to speed up integration projects delivered through numerous partners.
CSPs will benefit from Oracle's OSS stack offering by leveraging multiple preintegrated cloud-service-enabled solution components that address end-to-end operational processes.
CSPs should keep in mind that Oracle's aggressive cloud strategy investments have yet to be implemented on a wider scale, and thus, the full benefits of its new cloud solution architecture have not been shown.
Although Oracle's OSS suite is feature-rich and equipped with extensive functionality, some CSPs may perceive it as being operationally complex. This complexity may drive further integration, unless CSPs exploit the value by purchasing a fully integrated end-to-end Oracle solution.
Some clients indicate that there is a risk of additional project customization by partners; some clients perceive this customization may increase deployment costs.
ZTEsoft is a telecom operational technology software subsidiary of ZTE. It offers a comprehensive, end-to-end OSS/BSS suite comprising service fulfillment, assurance and network planning capabilities.
The solution is branded as "'ZSmart OSS" suite, which includes support for virtual and hybrid networks. It has a broad cloud-oriented vision for its ZSmart products and has a well-defined roadmap of delivery. ZTEsoft has deep penetration in the Chinese market. ZTEsoft is a member of the R&D boards of China Telecom, China Unicom and China Mobile. It has expanded into several CSPs in Asia/Pacific, Europe and Africa. It participates in industry standardization initiatives, like ONAP, and it has been investing in solutions for NFV/SDN to drive the adoption by CSPs in this area. It has limited global system integrator partnerships, and it leverages its own resources in most engagements.
CSPs surveyed for this research consider implementation of technical support resources and flexibility in accommodating custom technical requirements as differentiating factors for ZTEsoft.
Reference customers surveyed for this research appreciate ZTEsoft's flexibility in contracts, engagement and pricing.
Some CSPs can specifically benefit from ZTEsoft's full-stack solution and the company's approach to support additional customization and integration requirements.
Reference customers' feedback indicates the need for ZTEsoft to improve project management and support services, particularly outside of China.
ZTEsoft's product user experience, product documentation, system integration partnership and support structure vary in different geographies.
Communication about product roadmap during engagement is an area of improvement for ZTEsoft that was cited by reference customers.
We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant 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.
No vendor was added.
No vendor was dropped.
Vendors included in this Magic Quadrant offer multiservice and multitechnology, end-to-end solutions to the global market. We include vendors that sell end-to-end fulfillment and assurance solutions to CSPs. These solutions address CSPs' evolving multifaceted operational software, services, technology, and corresponding business and organizational requirements.
To qualify for inclusion, vendors need to meet the following inclusion criteria.
Independent software vendors (ISVs) — Only software publishers are included. Vendors that get significant revenue from both software and software-related services are included. NEPs that have their own stand-alone OSS product portfolios, providing multivendor and multitechnology solutions, are included in this category as well.
Functionality — The software suite has to provide the full range of core OSS management functions.
Adjunct functions can be provided either in-house or through partners.
Geographic reach — Vendors must have active OSS CSP customers for the core functionality in at least four major geographic regions, as defined in "Market Definitions and Methodology Guide: Communications Service Provider Operational Technology."
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.
Product or Service
Source: Gartner (February 2018)
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.
Offering (Product) Strategy
Source: Gartner (February 2018)
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 OSS suites.
They have ventured into adjacent markets, such as BSS, service delivery platform (SDP), CRM and analytics.
They have support both for existing legacy OSS modernization initiatives and to enable CSPs' transition toward new OSS orchestration solutions that support hybrid physical and virtual network technologies. This support is critical to enable prevailing transformation initiatives from a traditional CSP to a digital service provider.
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 implementation viability, and they can achieve and sustain high-quality, best-of breed and low-risk deployments.
Challengers are technology providers with strong execution capabilities and high-quality products and services:
They execute well, for the most part, and dominate large segments.
They do not yet fully exploit and address the future potential of the market.
The breadth and depth of their products do not match the capabilities of Leaders in this market.
Their visions are not as clear, and their strategies are 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 have put together a compelling OSS strategy in anticipation of CSPs' key pain points in the future, and which details how to address those pain points with innovative OSS products and services:
Therefore, vendors in this category demonstrate a clear market understanding.
Yet, they still lack certain skills in the area of execution to enable them to move into a leadership position.
Alternatively, it may just be that CSPs are not ready yet, from a technology perspective, to fully embrace the vendors' futuristic vision, in order to be able to execute at a leadership level.
The main characteristic of vendors in the Visionaries quadrant is that they are not as stable as the Leaders; also, their execution capabilities are not as advanced.
Visionaries are usually in the phases 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.
They could achieve this stable state by gaining market strength and scale, or simply by achieving wider adoption of their solution in the market.
The vendors in this quadrant offer products and services that cover a subset of functionality or that focus mainly on a certain geography:
They usually lack a well-defined strategy and a compelling vision moving forward.
Niche Players are unfocused and do not out-innovate or outperform other vendors.
To move in the Magic Quadrant, Niche Players need to fill vital solution gaps, find preintegrating partners in other geographies or build their own service capabilities.
CSPs are competing head-to-head with over-the-top (OTT) players, such as Amazon, which provide flexible on-demand, usage-based service models. Thus, for CSPs, OSS is a critical capability to embrace external innovation and enable the digital ecosystem. CSPs are facing challenges to enable evolving complex digital value chains. The emergence of new multifaceted business models may require the composition of multiple core telecom resources, in conjunction with external digital content service components. Often, CSPs do not own all the service components that make up the total value of a service delivered to the customer. Thus, convergent services require orchestration across not just multiple internal CSP divisions, but also external partner value chains. This poses new real-time processing and architectural agility requirements on OSSs.
The OSS's stack is indispensable in light of new network technology investments, such as Long Term Evolution (LTE), self-organizing network (SON), Internet Protocol (IP) and fixed technologies (such as fiber and copper). Often, investments on the network side drive the evolution of a dedicated OSS to manage and optimize the evolution of new technology in heterogeneous domains.
Moreover, the arrival of NFV and SDN will drive new investments in CSPs' OSS architectures during the next 10 years. As CSPs worldwide start allocating resources to build new SDN/NFV infrastructures, they realize the disruptive impact on existing, often-static, siloed OSS stacks.
The migration evolution of hybrid virtual and physical networks will pose additional requirements on OSS in terms of scalability, elasticity, configuration and remediation across end-to-end infrastructures. SDN and NFV will pose additional functional challenges on the flexibility and agility of current OSS assurance and fulfillment systems to be fully automated, open, flexible and technology-agnostic for both legacy physical and virtual services. These factors will drive CSP investments in more dynamic, real-time, analytics-driven and policy-based OSSs, enabling a more coordinated functional integration between all resource and service management instances and processes.
The vendor landscape reflects these changing OSS needs and investment patterns. We observe ongoing industry consolidation through mergers and acquisitions. Vendors must provide more holistic, comprehensive solutions, and they often fill solution gaps with niche solutions, such as embedded analytics, order orchestration correlation and aggregation, discovery and reconciliation or orchestration for cloud. These dynamics are set to enable the transformation of major operational value chains to enable new services and technologies, evolving around the following key operational priorities:
Improve business agility: Alignment of back-end operational systems with customer-facing IT.
Improve operational efficiency: Efficiency is needed 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 (capex): CSPs build business cases for alternative hosted cloud and managed services. CSPs also expect drastic opex and capex reductions related to the arrival of SDN/NFV (realized through sharing of resources), including common data centers, capacity management and commoditized hardware.
Superior customer experience: CSPs augment existing operational network and service assurance systems with big data and real-time streaming solutions to try to bridge the gap between network technology planning and the actual customer-perceived quality experience. Exponential data growth and real-time digital business models require better storage and data analytics capabilities.
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 to enable the trends outlined above. CSPs' requirements shift toward highly configurable, technology-agnostic OSS platforms, based on reusable components, aligned with business processes and standardized acceleration for particular services and technologies.
Core OSS products/technology have become commodities. Suppliers differentiate themselves through transformational implementation leadership, legacy integration and alternative delivery and pricing models, such as SaaS and PaaS. There have also been major OSS industry technology shifts — namely, SDN and NFV.
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).
For CSPs that are focused on the OSS vendor evaluation:
Invest in capabilities that allow operational abstraction to fully utilize your back-end SDN/NFV, 5G, IoT and big data investments, and overcome challenges to monetize new business models, such as network slicing.
Don't miss out on strong real-time, metadata-driven and operationally aligned customer-facing IT capabilities that will enable you to quickly expand your technology footprint and achieve commercial scale of your business.
Drive a radical organizational and talent overhaul to fully leverage your SDN/NFV technology investments, coupled with creating agile service capabilities around DevOps-style processes across architecture, development and operations for the network and IT.
Provide leadership capabilities to facilitate CSPs' transition to new operating models, agile processes and DevOps. This transition also requires soft skills related to cultural change management, organizational transformation and new people skill sets.
Invest in fully preintegrated digital OSS platforms, based on a modular, highly configurable, flexible open architecture that allows future evolution that is allied with CSPs' business goals.
Provide technology and content packs based on business best practices to ease integration efforts and speed up time to market (for example, for LTE, mobile and B2B technologies).
Ensure reference customer projects would be appropriate to support new technologies and services, and also include appropriate out-of-the-box devices and technology-specific data models.
Provide complementary business consulting, service design and integration, and implementation and business process best practices.
Multiple simultaneous trends will accelerate the need for architectural modernization and scale for high transaction volumes of OSS infrastructures (for example, for on-demand applications for digital commerce, mobile broadband, new connected devices and IoT). CSPs experience operational challenges related to the uptake of M2M, digital content, B2B (enterprise), cloud and OTT.
OSS infrastructures must enable convergent services across different technologies and network environments, such as fixed, mobile, broadband, LTE, IP Multimedia Subsystem (IMS), IP, cloud and virtual data center resources. 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). We expect OSS will experience a renaissance, likely taking a central role in bridging the technology gap between legacy and virtual networks, as well as enabling the transition from legacy services to new virtual, software-driven telco environments.
OSS 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 CTO, CIO and chief marketing officer (CMO) levels, which usually base decisions on a proven ROI.
As CSPs start investing in virtualized and software-driven infrastructures, OSS vendors are expected to assist their clients in making the transition toward new software-driven technology architectures. The arrival of NFV and SDN will be disruptive to CSPs' existing OSS architectures. Network- and customer-facing OSSs — such as provisioning; fault, event, and performance management; product catalog and analytics and policy — must be rearchitected to support network and service orchestration functions for hybrid infrastructures. These operations management systems will play a central role to support new hybrid operational and business models. The associated development tools and guidance on operational and organizational processes must be part of the solution.
New converged and composite services are becoming more complex, and they often are made up of telco networks and IT, as well as third-party content. These situations impose the need for greater operational agility for the rollout of new services and to deliver adequate customer experience. OSS embraces unified service delivery; unified fulfillment and data management across multiple sales channels and external partners' ecosystems.
Vendors are expected to leverage existing OSS platform technologies to enable evolving IoT market requirements. This implies a shift toward more congruent business- and process-driven, end-to-end OSS, BSS and CRM solutions to enable new IoT- and M2M-driven business models and partner ecosystems. SDN and NFV are seen as major drivers to enable IoT. CSPs must take the lead in defining their own end-to-end architecture, and they should also position vendors within that framework.
There has been a revitalization around service quality management and the corresponding network performance and capacity planning. CSPs now utilize 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 key performance indicators (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 — to make an impact in terms of financial metrics.
Although they don't fully meet the inclusion criteria for this Magic Quadrant, there are many viable alternative OSS vendors. This list includes vendors that operate in more than one region:
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.
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.