the service fulfillment sector of the oss by larry goldman
TRANSCRIPT
Key trends in serviceKey trends in service provider business models and servicemodels and service fulfillment
May 28, 2008y ,
Global Telecom Software Market Analysis www.ossobserver.com
Key trends
• Communications service providers are investing in new revenue growth from data-enabled gservices.
• Consumers and businesses are willing to spend more when specific needs are met with great ease.
• Competition cuts traditional revenue streams and forces CSPs to not only in basic services but in support for those servicessupport for those services.
© Copyright 2008 OSS Observer LLC www.ossobserver.com
2
Global Telecom Software Market Analysis
Agenda
• Communications industry trends• Industry basicsIndustry basics• Future of OSS• Service fulfillment and network engineeringService fulfillment and network engineering
© Copyright 2008 OSS Observer LLC www.ossobserver.com
3
Global Telecom Software Market Analysis
CSPs under pressure
• Data networking opens up the network to many more suppliers of services
• CSPs facing important issues in offering services and capturing a large share of the revenue enabled by their networks
• Their networks are the CSPs greatest asset. Managing the network for increased revenue and profit is a great challenge.
© Copyright 2008 OSS Observer LLC www.ossobserver.com
4
Global Telecom Software Market Analysis
Industry financials
$2,000,000
$1,000,000
$1,500,000
$2,000,000lli
ons
$0
$500,000
$ , ,
$ m
i
2003 200 200 2006
Revenue $1,228,611 $1,292,202 $1,464,692 $1,569,830
Capex $181,392 $200,710 $241,406 $263,371
2003 2004 2005 2006
Opex $787,847 $840,578 $963,239 $1,009,666
EBITDA $440,764 $451,625 $501,453 $559,982
© Copyright 2008 OSS Observer LLC www.ossobserver.com
5
Global Telecom Software Market Analysis
Source: OSS Observer
Revenue distribution
100%
f Tot
al
50%
Perc
ent o
f
0%
Business Services 10% 10%
Mobile 41% 45%
2005 2006
Mobile 41% 45%
Residential BB 5% 6%
PSTN 33% 28%
© Copyright 2008 OSS Observer LLC www.ossobserver.com
6
Global Telecom Software Market Analysis
Source: OSS Observer
Services growth
Services Growth
$600$800
$1,000$1,200
ons
2005 2006 2007 2008 2009 2010$0
$200$400$600
$ Billio
2005 2006 2007 2008 2009 2010
Mobile (CAGR 13%) $598 $712 $826 $933 $1,027 $1,109
PSTN (CAGR ‐15%) $484 $444 $400 $302 $302 $219
ResBB (CAGR 19%) $78 $93 $112 $134 $158 $183Res BB (CAGR 19%) $78 $93 $112 $134 $158 $183
Business (CAGR 10%) $150 $161 $180 $200 $220 $240
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
7
Global Telecom Software Market Analysis
Regional growth
Regional Growth
$500$600$700$800$900
s
$0$100$200$300$400$500
$ Billion
s
2005 2006 2007 2008 2009 2010
NA (CAGR 2%) $460 $468 $478 $489 $499 $509
EMEA (CAGR 7%) $595 $651 $711 $765 $807 $847
$
ROW (CAGR 9%) $409 $449 $496 $542 $586 $625
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
8
Global Telecom Software Market Analysis
CSP revenue by tiers - 2006
TierDefinition Number Tier revenue
1 > $10 billion 30 $938 billion
$1.6 Trillion 2 Between $1 billion and
$10 billionAbout 70 $277 billion
3 Between $100 million and $1 billion
About 300 $60 billion
4 Less than $100 million Over 2,000 $50 billion
Tier 3, 6%
Tier 4, 3% All $1.3 trillion
Tier 2, 23%
Tier 1, 68%
© Copyright 2008 OSS Observer LLC www.ossobserver.com
9
Global Telecom Software Market Analysis
Source: OSS Observer
OSS perspective
Commercial software spend is 1% of revenue
$1,200$1,400$1,600$1,800
s
$400$600$800
$1,000$1,200
$ Billion
s
$0$200$400
Revenue Opex Capex IT spend Commercial S ftSoftware
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
10
Global Telecom Software Market Analysis
Deploying OSSDeploying OSS
Global Telecom Software Market Analysis www.ossobserver.comGlobal Telecom Software Market Analysis
Most OSS choices at
Challenge100 CSP’s with over $1B annual revenue
choices at department
level
250 major business units ve
from
to
mer
1000 operating ust m
ovar
d cu
st
entities
focu
s m
ns to
wa
10,000 OSS-using departments
stem
s f
oper
atio
© Copyright 2008 OSS Observer LLC www.ossobserver.com
1212
Sy o
Get systems to impact the business as a whole
BusinessImpact
CChangeBusiness
ImpactCompetitiveAdvantage
IncreaseRevenue
Customer Experience
ReduceCosts Efficiency
Department Business CorporationOrganizationalScale
© Copyright 2008 OSS Observer LLC www.ossobserver.com
13OSS Market Analysis 13
UnitSource: OSS Observer
What drives spending
• New services are the most important driver for new spending.
» Focus on top line revenue growth» Focus on offering new services as a general pattern of business» New services embrace both entirely new functionality, e.g.,
location services, as well as bundling existing products
• Cutting / limited operating expenses (especially when tied to new services)to new services)
• Cutting capital commitments – mostly a US issue• Systems consolidation – losing momentum y g
© Copyright 2008 OSS Observer LLC www.ossobserver.com
14
Global Telecom Software Market Analysis
2006 IT spend
$71 billion IT spendComm products
14%
Product prof svcI l IT
Combined$16.2 billionCommercial
9%
HW & OS
Internal IT39%
Software
20%SI18%
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
15
Global Telecom Software Market Analysis
Future of OSSFuture of OSS
Global Telecom Software Market Analysis www.ossobserver.comGlobal Telecom Software Market Analysis
Future of OSS
Service Service Delivery PlatformService Delivery Platform
HSS
Service Layer
Application Server
ISC/SIPDiameter
Presence, 3rd Party Access, Messaging, Location, …y
HSS
CSCF
MGCF+MGW
IMS Control Layer
Transport
SIP
Diameter
xDSL CableUMTS GSMCDMA PSTNWLAN
IP Core Circuit SwitchedMGCF MGWTransport
Layer
Access Layer
SIP SIPSIP
3G Mobile Dual Mode Fixed Access Legacy Voicey
IMS Client Layer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
17
Global Telecom Software Market Analysis
Future of service fulfillment
CustomerCare
Billing
OrderManagement
PartnerCSPsg
Inventory / NRMEngToolsEng
ToolsInventory / NRM Activation
CSPs
S i
ActivationActivation
VoIP IPTVeMail GamingConferencing
Service Assurance
NetworkNetwork
Service DeliveryPlatformIMS
Content
© Copyright 2008 OSS Observer LLC www.ossobserver.com
18
NetworkSource: OSS Observer
Convergence requires managementg
Management• Personalized services
Systems impacts• Micro market• Personalized services
• Authentication• Service charging
• Micro market segmentation
• Transaction billingService charging• Revenue sharing /
partner payments• Real-time
authentication & ratingC id tit• Automatic service
registration• Capacity management
• Common identity system
• Product catalog• Capacity management Product catalog• Bandwidth
management
© Copyright 2008 OSS Observer LLC www.ossobserver.com
19
Global Telecom Software Market Analysis
• Resource planning
FulfillmentFulfillmentMarket
Global Telecom Software Market Analysis www.ossobserver.comGlobal Telecom Software Market Analysis
Telecom software
Service AssuranceService FulfillmentCustomer CareBillingService Delivery PlatformsPlatforms
Service Mgt
Fault & Event
Performance
Rating & Pricing
CRM
ChargingPartner &
InterconnectInventory
Order MgtCustomerInteraction
Probe Systems
Activation
Mediation
CRM
Eng Tools
Content Mgt
Telecom Apps Server
BusinessOptimization
Workforce AutomationSubscriber Mgt
Network Management Systems Device Mgt
pp
Mobile Residential Broadband
Business Data Services PSTN
Middleware
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
21
Global Telecom Software Market Analysis
Overall service fulfillment
$3,500
$2,500
$3,000
$1,500
$2,000
$ M
illio
ns
$-
$500
$1,000
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012
Fulfillment (CAGR 10%) $2,030 $2,233 $2,483 $2,760 $3,042 $3,330
$-
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
22
Different segments
$1 000
$1,200
$800
$1,000
llion
s
$400
$600 $ m
il
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012$-
$200
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012OM (CAGR 10%) $551 $607 $672 $743 $819 $902 Inventory (CAGR 14%) $534 $600 $700 $812 $926 $1,039 Activation (CAGR 13%) $404 $471 $541 $619 $690 $759 Eng Tools (CAGR 3%) $542 $555 $570 $587 $608 $629
© Copyright 2008 OSS Observer LLC www.ossobserver.com
23
Source: OSS Observer
Services
$1,200
$1,400
$800
$1,000
$ M
illio
ns
$400
$600
$
$200
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012
Mobile (CAGR 15%) $588 $648 $746 $878 $1,035 $1,190 PSTN (CAGR -2%) $260 $254 $253 $248 $243 $232 Business (CAGR 8%) $533 $596 $644 $698 $740 $785 Res BB (CAGR 12%) $649 $734 $837 $932 $1,025 $1,123
$-
© Copyright 2008 OSS Observer LLC www.ossobserver.com
24
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
25
Global Telecom Software Market Analysis
Engineering tools forecast
$620
$640
$580
$600
ns
$
$540
$560
$ m
illio
n
$480
$500
$520
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012Eng Tools (CAGR 3%) $542 $555 $570 $587 $608 $629
Source: OSS Observer
© Copyright 2008 OSS Observer LLC www.ossobserver.com
26
Global Telecom Software Market Analysis
Changing role of engineering toolsg g
• Prepare networks for delivery of services, particularly converged data servicesy g
• Prepare networks to rapidly activate new customer service
• Support installation, maintenance and customer support
• Industry is shifting from discreet tools for different engineers to a more integrated view of inventory,
i i d ll f lfill tengineering and overall fulfillment process
© Copyright 2008 OSS Observer LLC www.ossobserver.com
27
Global Telecom Software Market Analysis
Engineering
• CSPs need to leverage their strongest asset, their networks, in order to capture as much customer spending as possible.
• OSS and particularly network engineering plays an important role in preparing networks to deliver services easily and efficiently.
© Copyright 2008 OSS Observer LLC www.ossobserver.com
28
Global Telecom Software Market Analysis
OSS Observer
Thank you
© Copyright 2008 OSS Observer LLC www.ossobserver.com
29
Global Telecom Software Market Analysis
OSS Observer StaffAnalystsLarry Goldman ChicagoLarry Goldman – ChicagoPatrick Kelly – BostonPeter Mottishaw – UKRoz Roseboro - Chicago
Check us out at www.ossobserver.com
g
Business [email protected]
PO Box 1319Janita Goldman – client services
Sales
PO Box 1319Sugar Grove, IL60554+1.630.466.9223
Jan [email protected]+1.817.267.6637
1.630.466.9223
Global Telecom Software Market Analysis www.ossobserver.com