IDC Expects the Market for Next-Generation Operational Support Systems to Double by 2004

FRAMINGHAM, MA – SEPTEMBER 6, 2000 – Stimulated by substantial investments in Internet protocol (IP) products and the increasing use of packaged software over custom-developed software, the market for next-generation operational support systems (NextGen OSS) is well positioned to grow. And grow it will. IDC estimates revenues will more than double from under $3 billion in 1999 to over $7 billion in 2004.

"Service providers' investments in IP products are fundamentally altering the network infrastructure. Adoption patterns of specific technologies – broadband, wireless, and optical – will have a formative influence on operational support system spending," said Elisabeth Rainge, program manager for IDC's Network and Service Management research. "Additionally, the growing shortage of skilled networking professionals will compel service providers to choose commercial software over custom developing projects, which will further drive the market."

IDC splits the NextGen OSS market into the following segments: provisioning, assurance, and billing. Assurance, which includes applications and tools that monitor, tune, and report on the service-provider infrastructure, is the fastest-growing segment of the market. Revenues in this submarket will increase at a compound annual growth rate (CAGR) of 32% from 1999 to 2004, compared with a 19% CAGR for the overall market.

The provisioning segment will also grow faster than the overall market. "In the near term, provisioning revenues will have strong momentum as service providers build out and formalize broadband, optical, and wireless networks," Rainge said. Nevertheless, in 2003, the assurance segment will become larger than provisioning. Throughout IDC's forecast, billing will be a stable but important component of the NextGen OSS software market.

IDC believes the overall market is very much in the development phase. Right now best-of-breed players and network equipment manufacturers, and consultancies are coming together to create OSS solutions, and coopetition is the norm. However, IDC expects competition to heat up soon, and service providers will be faced with challenges involving technology, customers, business modes, and industry structure.

"The adaptive and regenerative capabilities of a service provider's infrastructure management team will be as essential to success as its capabilities of next-generation OSS," Rainge said.

Information like the above can be found in IDC's report NGN OSS Market Forecast and Analysis, 1999-2004 (IDC #B22517). This report analyzes opportunity in the NextGen OSS market. It forecasts revenues through 2004 by submarket and discusses the changing dynamics of the market. It also examines the market's development stages. To purchase the report, contact Bruce Atlas at 1-800-343-4952 extension 4053 or

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

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