The Future of OSS

With Operations Support Systems going through a metamorphosis, Sanjay Mewada, Vice President of Strategy at NetCracker Technology, identifies four key trends driving this change: industry consolidation, network and IT convergence, the emergence of a services and content ecosystem and the demand for user-generated services.

By Sanjay Mewada, Vice President of Strategy, NetCracker Technology

The Operations Support Systems (OSS) industry is undergoing fundamental change, and in five years, OSS will be very different from what it is today. Four main trends are driving the change: industry consolidation, network and IT convergence, the emergence of a services and content ecosystem, and the demand for user-generated services.

Industry Consolidation
The OSS industry, which has traditionally been highly fragmented, has been consolidating rapidly. This consolidation has been driven by communications service providers (CSPs) that are demanding strategic solutions that they can use to transform and future-proof their operations environments. Rather than having hundreds of OSSs, one for each service, network and operations function, they now require solutions that span multiple services and domains. CSPs are drastically reducing the number of OSSs they manage — and they are reducing their vendor list to a few strategic partners.

Billing and CRM vendors, equipment providers, systems integrators and software and applications vendors all recognize the value of OSS and the importance of adding it to their product portfolios. At this time no one can accurately predict which merger and acquisition business model will prevail, but it is clear that OSS will hold center stage.

Mergers and acquisitions among OSS and BSS vendors — for example, Oracle’s acquisition of MetaSolv and Amdocs’ acquisition of Cramer — have created individual companies that address multiple back office functions. These mergers create the possibility of integrated software suites that manage all activities from initial customer contact to service fulfillment and billing.

In addition, network equipment providers have begun to invest in OSS — as demonstrated by NEC’s stated intention to purchase NetCracker. This acquisition — through the addition of NetCracker’s OSS — will enable NEC to provide more complete hardware and software solutions for CSPs.

Nancee Ruzicka, an analyst in Stratecast’s OSS/BSS Global Competitive Strategies organization, states that the need to manage services and customers in a separate Service Layer — instead of in the network element — is compelling equipment vendors to broaden their businesses. “They are doing this by taking a bigger stake in OSS,” she says.

“Just as IBM transformed its focus from hardware to software, network equipment providers are making major investments in their software businesses,” observes Roz Roseboro, Senior Analyst in Analysys Mason’s Global Telecom Software practice. “This is partly in response to hardware pricing pressures, but is also recognition that software can be a sustainable, competitive differentiator.”

In addition, the convergence of network and IT domains is creating new synergies. Martina Kurth, Research Director, Carrier Operations & Strategies at Gartner, points out that CSPs are deploying next-generation content services, and this is forcing network and IT to find a common OSS solution that manages across both domains. “As a result, we expect more IT and network equipment vendors to pursue OSS mergers and acquisitions,” she says.

Equipment, software, and platform vendors have all been making substantial investments in OSS because they recognize that OSS is critical to the success of CSPs — and to themselves.

Investment in next-generation OSS can:

• Create sustainable differentiation for vendors;
• Enable CSP business transformations;
• Build long-term, strategic relationships between vendors and CSPs.

Consolidation has the potential to strengthen the entire industry by producing more powerful OSS, stronger relationships between vendors and CSPs — and CSPs that can respond quickly and cost effectively to their customers’ multi-dimensional demands.
The challenge is to realize this potential — to develop integrated OSS that deliver complex services, manage across network and IT and assure customer experience.

Network and IT Convergence
To remain competitive, CSPs must deploy next-generation, content-rich converged services. These services typically utilize both network and IT infrastructures.

While continuing to manage the Network Layer, CSPs must now focus more strongly on the Service Layer — on the end-to-end management of the service and customer experience. Ruzicka’s research shows that service providers are overwhelmed by the volume and complexity of network, IT, partner and customer elements that need to be monitored and managed.

What’s required is an integrated OSS that can manage converged services and network and IT resources from a single platform. This integrated OSS must enable service creation, delivery and assurance over diverse infrastructure from switches to servers, from multiplexers to multi-access terminals, across OSI Layers 1 through 7 and from the core network to the premises.

The OSS must be fully configurable and capable of modeling any service, device or application. It must be standards based and built — from presentation layer to core — using modular, scalable technologies such as J2EE, Java and SOA. Fully open internal and external APIs are required to minimize integration effort and cost.

OSSs built on proprietary architectures are not flexible, do not scale and cannot manage across network and IT domains and should be replaced.

Nancee Ruzicka summarizes the situation: “The only way that CSPs can control their operations — from content management to device configuration to billing — is with automated, integrated OSS that are consistently implemented across all services and products.”

Services and Content Ecosystem
Competition is driving CSPs to provide next-generation converged services. At the same time, the traditional CSP value chain is evolving into a services and content ecosystem in which service elements are bought and sold by CSPs, content providers and software vendors. In this ecosystem, CSPs cooperate as well as compete with content providers.

The continued growth of this ecosystem is inevitable, and CSPs will need to participate in it to remain competitive. The ecosystem requires a whole new business model — and a new, integrated, service-centric OSS that understands how services are created, configured and assured, and also understands what resources are invoked.

“To automate third-party interactions and to facilitate the monetization of content services, CSPs must expose re-usable elements, such as presence or location,” asserts Gartner’s Kurth. “How well a CSP exposes its OSS capabilities to third parties will determine its success.”

Telecom software plays an essential role in delivering and managing content services. “For example, Service Delivery Platforms manage the creation and delivery of services and metadata,” says Analysys Mason’s Roseboro. “They also ensure that device configurations and settings are optimal for subscribed services.”

By distributing secure, high-quality services and content, CSPs can monetize the ecosystem. To do so, however, requires an OSS that can manage services across multiple networks as well as partner boundaries, and that can create service bundles from individual service elements. “To remain competitive, CSPs must participate in a secure, cost-effective ecosystem that is easy for third parties to utilize,” says Stratecast’s Ruzicka. “At the same time, CSPs will ultimately be responsible for the quality of service experienced by their customers.”

User-Generated Services
The services and content ecosystem makes it possible to create and deploy customized services for narrow target markets, including the market of one, thereby setting the stage for an explosion of user-generated services. This means that service creation, distribution and customization will migrate to end users and to a diversity of end-user devices.
 “Over the next five years, we expect considerable carrier investment in new distributed OSS architectures that underpin the ecosystem as well as user-generated services,” says Kurth.

According to Ruzicka, “This user-centered environment requires an integrated, automated, and scalable OSS that is device and service independent.” It also requires that end users be given real-time access to the OSS using intuitive interfaces that allow them to create services, invoke resources and manage quality.

The OSS infrastructure must be supplemented with business processes and rules. “To give customers choice and control while preventing them from making configuration errors, CSPs must implement automated bullet-proof processes,” cautions Ruzicka.

Providing scalability and security as well as real-time access and rules-based service creation is a significant challenge to developing the OSS of the future. A fundamental shift in the way users acquire, share and manipulate content is already taking place, however. CSPs who embrace their users and the services ecosystem will open up a world of new possibilities — and new markets — that will enable them to grow and prosper.

OSS: The Next Generation
The emergence of a services ecosystem and the proliferation of converged, user-controlled services are driving the need for a next-generation OSS that is flexible and scalable and that provides secure, real-time access to end users.

The next-generation OSS must enable an ecosystem that delivers unique services and content. It must provide a foundation for the new business models critical to the success of CSPs. And finally, it must manage any service or application, for any device, over any infrastructure, whether network or IT.

“For the foreseeable future, most implementations will not have the integration to interact with the services ecosystem and deliver converged, user-controlled services in an optimal or cost-effective manner,” concludes Ruzicka. But she goes on to state that “The next-generation OSS and its benefits will ultimately be delivered.”

CSPs must push forward with integrated OSS that can meet the challenges of the future. Their competitive position and ultimate success depend on it.