Heavy Reading
EXECUTIVE SUMMARY

Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector

With wireless carriers now making decisive moves to bring higher-speed packet data network access to their customers, the need is building not only to manage next-gen infrastructure, but also to manage a multitude of convergent, personalized services traveling over them. While legacy operations support systems (OSSs) sufficed for years as islands of automation, OSSs built for next-gen wireless packet-based networks will succeed or fail based on their suppliers' ability to create products and partnerships that allow for maximum interoperability not only with different types of equipment from hardware manufacturers, but also with different types of OSSs and BSSs (business support systems) from other software suppliers.

Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector identifies and analyzes the kinds of relationships that next-gen OSS vendors are now developing with hardware manufacturers, systems integrators, and other OSS suppliers as they position themselves to take advantage of the wireless carrier migration to packet-based network architectures and services. The report is based on surveys, questionnaires, and telephone interviews conducted with OSS vendors, hardware manufacturers, and systems integrators. More than 500 different relationships between OSS makers, hardware vendors, and systems integrators are cataloged and evaluated.

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In addition to identifying specific OSS channel relationships, this report describes and evaluates the types of relationships now being pursued by OSS suppliers, hardware vendors, and systems integrators, and then rates the quality of the channel partnerships of all participating vendors with an eye toward determining which suppliers have made the most progress in fulfilling their respective OSS channel strategies. Channel partnerships are identified for 40 different OSS and wireless systems vendors, including 30 public companies and ten private companies.

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In developing this report, Heavy Reading focused on the following wireless equipment categories, as defined in Heavy Reading's next-generation wireless infrastructure taxonomy:

Base Transceiver Station (BTS)
Node B
Radio Network Controller (RNC)
Base Station Controller (BSC)
AAA Server
Home Agent
Foreign Agent
Packet Data Serving Node (PDSN)
Serving GPRS Support Node (SGSN)
Gateway GPRS Support Node (GGSN)
Media Gateway

For OSS categories, we used the 12 market sectors identified and analyzed in Heavy Reading's Fall 2003 OSS Market Perception Study:

Retail billing
Revenue assurance and fraud management
Mediation
CRM (customer relationship management)
EMS (element management systems)
Middleware
Resource/inventory management
Fault management
Performance monitoring
Service management
Service activation
Service provisioning

Report Objectives

Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector was created to answer the following critical questions:

How active are OSS suppliers in building channel partnerships to sell to the next-gen wireless marketplace?
What depth of technological and business-level collaboration characterizes existing channel relationships?
Which OSS categories are driving the most channel activity?
Which OSS vendors are most aggressive in forging channel partnerships?
What are the different kinds of channel partnerships being forged?
Which hardware vendors are most active in serving as channels for OSS suppliers?
Which categories of OSS supplier are most active in serving as channels for other OSS suppliers?
What is the role of systems integrators in the OSS channel to wireless service providers?
What responses to carrier demands for rapid, low-cost integration are evident in the nature and quality of OSS channel relationships?
What responses to carrier demands for best-of-breed flexibility are evident in the nature and quality of OSS channel relationships?

Key Findings

Key findings of this report include the following:

Service proliferation combined with constrained wireless bandwidth is radically reshaping OSS channel strategies around enabling "service-aware" networks. Channel partnerships are now being driven up the TeleManagement Forum's "element-network-service-business" management pyramid to a wholehearted focus on the service management layer. This is translating into service-centered partnerships among OSS and hardware suppliers and systems integrators that say their joint solutions can fulfill, assure, and bill for tens and eventually hundreds of personalized wireless data services - primarily by closing the automation gaps among service utilization, network resource, and customer care management.

The hottest segments for wireless OSS channel deals are service provisioning and inventory management. Together, service provisioning and inventory management account for nearly half of the 514 channel relationships identified in this report. Inventory management suppliers such as Cramer Systems and NetCracker Technology are evolving their "inventory-centric" OSSs from static repositories to active applications that feature service provisioning.

OSS partnerships are no longer forming around generic comprehensiveness, but rather around enabling cross-domain, lifecycle management. Most wireless service providers have largely completed infrastructure buildouts and have put in place network management, service management, and subscriber management OSSs that remain painfully dissociated from one another. Now, as they race to launch packet communications and multimedia services, those service providers are demanding solutions that abstract and correlate data from these separate domains to automate the production of operations and business intelligence.

Systems integrators are a stronger OSS channel magnet in the wireless sector than in wireline. While many SIs have limited their work with telecom to the same business support system (BSS) integration services they sell to many industries (accounting, human resources, and customer and supply management), the complexities and pace of data infrastructure deployment and new service creation in wireless is creating more demand for SI services in wireless OSS software as well. The demand for cross-domain OSS functions clearly plays to the strengths of SIs as coordinators of multivendor solutions.

Prime contractorship dominates wireless hardware procurement, distinguishing a limited set of key channel candidates among hardware suppliers. Major wireless infrastructure suppliers such as Alcatel, Ericsson, Lucent Technologies, and Nortel Networks bundle smaller suppliers' hardware and OEM components in their comprehensive offerings, leaving the smaller hardware suppliers out of the OSS channel loop and answering buyer demands for fewer suppliers to manage. Cultivating these prime contractors as referral channel partners can help OSS suppliers to ride those bigger vendors' coattails into lucrative contracts - if they can find willing hardware partners.

However, as buyers shift focus from network building to service creation, demand for bundling OSS products with hardware is static or declining. Only 12.6 percent of all partners cited by respondents are hardware suppliers. This relatively low percentage may reflect both their limited numbers and the emerging emphasis on service-layer, rather than network-layer, solutions. To make sure they maintain a share of the software market as well, hardware prime contractors such as Alcatel, Ericsson, and Lucent Technologies are developing larger portfolios of their own OSS products, beyond traditional element management.

Channel participants expect continued OSS supplier consolidation. During the course of our survey, Telcordia Technologies acquired inventory management supplier Granite Systems, and convergent billing and customer care software supplier Convergys acquired WhisperWire, a provider of sales effectiveness software. Key hardware, software, and SI players such as Hewlett-Packard and Ericsson expect consolidation of OSS vendors to continue for two main reasons: Buyers want to further rationalize choices, and suppliers believe more comprehensive solutions will strengthen their hand with buyers who need cross-domain solutions.


Key Survey Data Points

Although the survey conducted for this Heavy Reading report focused on individual companies and their OSS channel strategies, collective data from the survey points to some significant trends - some of them unique to the wireless sector - in the development of the next-gen OSS market, including the following:

OSS categories that focus on service creation, provisioning, and assurance (service provisioning, service management, service activation) and on measuring the usage of services (mediation and revenue assurance) account for over half of the channel activity among OSS vendors, equipment makers, and systems integrators. Conversely, OSSs focused primarily on managing the network, operating for the most part below the service layer (element management, fault management, performance monitoring), account for less than 10 percent of reported partnerships. Inventory management, which suppliers are enhancing to embrace service-provisioning functions, stands as the one exception to slow channel activity below the service layer.

More than 60 percent of the 514 different OSS channel relationships cited by vendors responding to Heavy Reading's survey involved service-centric OSSs. Reciprocity between service provisioning and inventory management - a key element of an overarching trend toward making network management systems look "upward" toward the service-management layer - appear even more evident here as a prime driver of channel partnership activity reported by survey respondents.


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OSS channel activity aimed at bringing service awareness to network equipment is particularly focused on next-gen data transmission hardware. More than half of all identified hardware channel relationships involve data user authentication equipment (AAA servers), home and foreign agents for data network access devices, and data network serving and support nodes. The vast majority of new services and potential new revenue streams are being created in this data networking segment of the infrastructure, and increasingly this is being aided by 3G and other broadband transmission technologies.


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Report Structure

Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector provides in-depth analyses, based on dozens of interviews with OSS vendors, wireless equipment makers, and systems integrators, on the key factors that are now shaping the development of the market for next-generation wireless OSSs. The analysis sections are presented as follows:

Defining and Redefining Wireless OSS Channel Partnerships (Section II): This section covers the changing nature of relationships between wireless OSS suppliers and their channel partners, particularly between larger, "best-solution" OSS companies and "best-of-breed" specialists.

Next-Gen Wireless OSS Channel Trends (Section III): This section focuses on the emergence of cross-domain OSS products and strategies. It includes detailed analyses of "service-facing" OSS strategies now being developed by several key vendors.

Systems Integrators in Wireless OSS Channels (Section IV): The increasingly important role played by systems integrators in wireless OSS channel partnerships is explored in this section.

Sections V and VI present data gathered by Heavy Reading on wireless OSS channel partnerships reported by survey participants. Section V focuses on channel partnerships identified by OSS vendors, while Section VI covers partnerships identified by hardware manufacturers.

To quantify these OSS channel efforts, Heavy Reading created a comprehensive rating system, called the Channel Quality Score, which factors in the market standing of each channel partner and the nature of the channel partnership. The report includes full disclosure of all OSS channel partnerships reported by the participating vendors.


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Along with cataloging channel relationships, the report offers insight into each vendor's channel strategy and delivers a competitive analysis of channel strategies undertaken by OSS and hardware vendors with similar product portfolios.

The report is essential reading for a wide range of industry participants, including the following:

OSS and wireless equipment vendors: How does your OSS channel strategy compare with those of your competitors? Are you able to present your carrier customers with the kinds of integration options that they can get from other vendors? Are there strategic partners that you can cultivate to strengthen your OSS integration portfolio? Do you need to reevaluate the kinds of OSS partnerships you now have in place?

Systems integrators: Is there an opportunity to strengthen ties to OSS channel partners while maintaining your overall independence to allow for best-of-breed product selection? Which vendors are most open to cultivating relationships with SIs, and which have closed the door on SI partnerships? How are your competitors navigating the OSS channel waters?

Wireless network operators: Which OSS and systems vendors have adopted integration strategies that best fit your needs? Do some channel strategies make it difficult to pursue best-of-breed solutions? Conversely, which next-gen vendors are in the best position to deliver tightly integrated hardware and OSS products to enable quick deployment of new revenue-generating services?

Investors: Which next-gen wireless OSS vendors are in the best position to gain market share and market value through their aggressive pursuit of channel relationships with larger partners? Which equipment makers are responding best to changing demands from their carrier customers?

Next-Gen OSS Channel Partnerships and Strategies: Wireless Sector is published in PDF format.

LENGTH: 77 PAGES
PRICE: $3,495
PETER LAMBERT
Analyst, Heavy Reading
Peter Lambert has covered the telecom-munications technology markets as a consultant, analyst, and journalist since 1986. His areas of expertise include telecom and cable operations support systems (OSSs) and business support systems (BSSs), managed application and content services, digital media, packet network technologies and services, broadband content and commerce, and optical and electrical transport technologies...
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KEY FINDINGS
The need for service-aware networks is driving demand for next-gen wireless OSS
Wireless OSS channel activity is focused on service provisioning and inventory management
Cross-domain OSSs are now more critical than single-function products
Systems integrators play a larger role in wireless OSS channels than in wireline
Hardware channel partners for wireless OSS vendors are limited in number
Further vendor consolidation is expected by most wireless OSS channel players
DELIVERABLES
77 pages of data and analysis covering more than 500 different wireless OSS channel partnerships

Results from in-depth questionnaires gauging wireless equipment vendor attitudes about their relationships with OSS channel partners

Full results from an exclusive survey of OSS channel partnerships involving more than 40 wireless OSS and hardware vendors

Incisive comments from OSS vendors, wireless equipment suppliers, and systems integrators regarding their varied and changing approaches to OSS channel partnerships
LENGTH: 77 PAGES
PRICE: $3,495
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