Continued growth for optical-network management software market

Oct. 1, 2002

Today's carriers are turning to network management software to help lower their ongoing operational expenditures, leverage their existing infrastructure, and maximize investments. As a result, the optical-network management software market has not been as hard hit by the current downturn as other segments.

Software used in the management of U.S.-based telecommunications networks will net $6.6 billion by 2006, contends a new report from Communications Industry Researchers (CIR—Charlottesville, VA). The market for optical-network management software will account for $3.7 billion of that total.

Optical-network management is not completely distinct from "regular" network management, explains Ian McPherson, senior analyst of optical networking at CIR. However, each class of operator does have its unique set of requirements. The RBOCs, for example, require more exacting tools than the non-RBOC incumbent local-exchange carriers (ILECs), whose software requirements differ from those of the competitive local-exchange carriers (CLECs).

Because of their extreme sensitivity to network performance and downtime, the RBOCs implement different measurements and more exacting tools to keep their networks operating robustly. One of those tools is Telcordia's Technologies' operations systems modification of intelligent network elements (OSMINE) process.

The RBOCs have many generations of equipment in their networks, says McPherson, "and service providers typically don't remove equipment or a network once it's up and running. They basically just layer on top of it, because if it's working they don't want to touch it." OSMINE verifies that new optical-network elements can, in fact, communicate with the RBOCs' existing network management systems.

The OSMINE qualification process can be both lengthy and expensive, but the RBOCs wield the market power to force vendors to comply. "It's very onerous for the system vendors, especially the startups, because that's basically just their ticket into the door; there's no guarantee that you're going to walk home with the prize," says McPherson.
The market for software used in the management of U.S.-based telecommunications networks will net $6.6 billion by 2006. Optical-network management software will account for $3.7 billion of that total.

The non-RBOC ILECs have less rigorous, less formalized certification processes, but nevertheless demand robust capabilities. "Someone who is selling into them has to have the capability to do simple management—adds, moves, and changes on systems and provision new circuits—as well the two-way communication, being able to talk to the boxes themselves to be able to put up new services and change the way they are operating," explains McPherson. "They also need to be able to look in and get information about the health and status and performance of that box."

The ILECs typically use a more generic simple network management protocol (SNMP) platform, which provides roughly the same information as the OSMINE process but does not enable the same level of control or granularity.

The CLECs, on the other hand, are interested in a single software package that will address both voice and data transport. "They have collapsed their organizations and tend to have one engineering group that manages both the data and the transport side of the network," explains Tom Fuerst, director of global solutions at Alcatel (Paris), "so they are looking for one manager that does both."

Among the various software types, provisioning still holds the lion's share of the market, says McPherson, because all networks need software to enable the adding or dropping of new users and services.

Carriers also need the tools to evaluate baseline network performance, and performance management has become increasingly more important as carriers seek alternative ways to manage and operate their networks, adds McPherson. Carriers are turning to performance management software to help them answer critical questions about whether their networks can accommodate more users, provide better performance, or generate more revenue.

"From a service assurance standpoint, which includes fault management, performance management, and service-level reporting, there is no question that service assurance software is even more important in an [all] optical network than it is, for example, in SONET networks," agrees Alexandra Zaporozec, vice president of marketing for independent software vendor Clear Communications (Lincolnshire, IL).

Zaporozec contends that such software will prove to be the catalyst for the deployment of truly intelligent optical networks in the future. Today's carriers may have the requisite optical gear, she maintains, but all the paths remain fixed, "because carriers haven't had the security, the visibility into the network to feel comfortable enough to let these optical networks perform at their peak, which is intelligent switching," she says. Network management software can provide that security and visibility.

Network planning has also become more important in the current economic downturn. Most network operators today get by with manual processes, but as they develop more sophisticated systems and boxes that carry out multiple functions, it becomes more difficult to make what McPherson calls "back of the envelope" calculations.

"Vendors are seeing a much greater need to provide a robust planning platform, something that would tell carriers not only 'what would it look like if I had to add a circuit from point A to point B?' but 'what are my options?" explains McPherson.

Equipment vendors typically provide element management systems (EMSs) for the management of their devices, and that continues to be good business for them despite the economic downturn. According to CIR, software upgrades and maintenance fees derived from installed networks will generate revenue for established vendors like Alcatel, Lucent Technologies, and Nortel Networks, regardless of sluggish equipment sales.

To continue to see software revenue, though, vendors must focus on what McPherson calls "functionally appropriate support systems and management systems."

"If you're making an edge router, and you're just sitting way off at the edge of the network, and you spend all this money to develop a management system that manages every device from every vendor in the network, nobody is going to use it because of your relative place in the network," he reasons. "And you've blown a lot of money that could be spent on more immediate concerns."

That said, a carrier could have five, six, seven, or more different EMSs to manage one piece of the network, and that becomes a problem because each EMS has a different standard upstream, says Fuerst. "It got to be a huge nightmare for the operator," he reports.

In an effort to remedy this dilemma, the TeleManagement Forum (Morristown, NJ) is working on a specification (TMF 814) to define a common northbound interface among EMSs from equipment vendors and the carriers' management system.

At press time, the specification was "pretty close to finalization," contends Laurent Legourrierec, director of network management strategy for Alcatel. "We have seen many RFIs [requests for information] and RFPs [requests for proposals] from a majority of customers asking for compliance with the standard, which means that the standard has reached a degree of maturity that is satisfying enough for the operators."

Among the independent software providers, Telcordia will continue to be a formidable presence in the market, thanks to its hold on legacy systems, says the CIR report. However, other independent software vendors are poised to capture larger market shares as the industry recovers, including Micromuse, Hewlett-Packard, and MetaSolv. The third-party software providers will see increasing opportunities, because they can provide integrated and consolidated management functions in carriers' multitechnology and multivendor environments.