Update on OSS Consolidation Part 1 Weblog Article: Service Management

At the start of April I wrote about the consolidation in the service management space and the major trends of:

  • Consolidation of functionality.  Just like enterprise IT, as mature functions are subsumed.  For example, once upon a time a service provider would buy a VoIP fulfillment platform, now multi-service fulfillment is the norm.
  • Emergence of managed solutions.  This is coming more from the Service Delivery side of the competitive landscape.  Rather than buy a license and pay an SI, we’re starting to see solutions (particularly in self-service) being managed by the technology provider on behalf of the service provider; which saves costs for the operator and the technology supplier, especially for those with scale.
  • Consolidation of companies.  The ‘big guys’ like Oracle and IBM have recently bought some of the medium-sized suppliers; but we’re also seeing consolidation amongst the medium sized suppliers, e.g. Sigma Systems buying C-Cor, and Subex buying Syndesis, as they race to achieve scale.
  • Best of Breed components do not generate a Best of Breed system.  Tier 2/3 markets have generally focused upon all-in-one solutions because of limited scale and cash.  Tier 1 operators have generally implemented a ‘best of breed’ component approach.  However, as we’ve seen in several cases, which I’ll not name here, having a kitchen full of Michelin chefs does not necessarily result in a meal worthy of a Michelin star.
  • Strong push with most operators to control their escalating BOSS spend on both legacy and new services.

Since that article we’ve seen the follow consolidation:

I thought by the end of this year I’d need to update the small-medium fulfillment landscape, however, with the above 5 deals being announced within 3 months, I’m updating sooner than I expected.  Generally these smaller companies have exited into the larger telecom network equipment providers or telecom software solution providers.  What will be interesting to see over the coming months is whether some of the medium sized suppliers in this space can merge and create a long-term viable independent business necessary for sustained innovation and price competition, or will they all just exit into the ‘big guys.’