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WORLD OSS SERVICE ASSURANCE MARKET ANALYSIS

In this analysis, the overall OSS Service Assurance Market is divided into six sub-segments, which include: -Problem Handling -Customer QoS Management -Service Problem Resolution -Service Quality Management -Network Inventory Management -Network Maintenance & Restoration

Market Information & Forecasts- -Number of competitors: Less than 30 -Overall Market Share Leader: Agilent (the top six companies account for more than 51 percent of the overall market share). -Previous Revenues (2000): $2.43 Billion -Potential Revenues (2006): $3.23 Billion

Top Industry Trends: Market drivers: Changing Network Technologies Service Provider Competition Drives the Need for Service Assurance Solutions Operating Cost Savings Migrate towards Off-the-Shelf Solutions

Market Restraints: Economic Downturn in the Telecom Sector Legacy System Integration Uncertainty of Dominant Network Technology "Not Invented Here" Objections Service Assurance Not Recognized as Mandatory Illusion of Unlimited Bandwidth

Market Challenges: Scalability of OSS Service Assurance Solutions Integration and Interconnection of OSS Service Assurance Solutions Changing Network Technologies Require Product Adaptations Multiple Vendor Products Needed for Complete Solution

Need for Reliable Networks Bolsters Demand of Service Assurance Solutions

Network service providers are increasingly emphasizing the reliability of their networks to differentiate their products from their competitors. Consequently, demand for solutions that can assure service is rising rapidly.

By reducing network vulnerability, minimizing downtime, and accelerating time to market for new offerings, service assurance solutions will continue to play an essential role in the strategy of network service providers over the long term.

New analysis by Frost & Sullivan, www.frost.com, World OSS Service Assurance Market Analysis, reveals total revenues reached $2.43 billion in 2000, and will rise to $3.23 by 2006.

"Service assurance providers with the most opportunity will be those that support the convergence of traditional circuit-switched systems with next-generation networks," says Frost & Sullivan OSS Program Leader Jim Alsman. "Providing complete, seamless solutions that facilitate the migration to Next Generation and data-centric networks will keep assurance providers in strong demand."

An ongoing trend toward off-the-shelf solutions will also support continued growth, as participants migrate from internally developed systems to commercially available solutions.

"The cost involved with maintaining internally developed systems is too great for many companies, while others lack the qualified network operations personnel," says Alsman. "Service providers are looking for service assurance solutions that ease the process. Network operators do not want to have to be network experts to operate and manage the network."

Despite the promise of this field, the economic downturn in the telecommunications sector could restrain growth in the short term.

"There has been a mass slowdown of capital spending that has caused service providers to postpone the implementation of service assurance and other operations support systems management applications," says Alsman. "Software-only solutions providers have faired better during this turbulent time than combined hardware or software companies."

Alsman advises companies to employ a narrow focus on high-margin software, which should help firms overcome immediate economic obstacles.

Frost & Sullivan presents the 2001 Marketing Engineering Awards to companies that have worked diligently to make a positive contribution to the service assurance industry. These market-specific awards are presented to: Agilent Technologies, Alcatel Inc, Concord Communications Inc, Micromuse, and Microsoft Corporation.

The following is a list of key industry participants: Agilent Technologies; Acterna LLC; ADC Telecommunications: Alcatel Inc; Cisco Systems Inc; Clear Communications Ltd; Compaq Computer Corp; Concord Communications Inc; EHPT; Evidian/Group Bull Company; Harris Corp; Hewlett-Packard Inet Technologies Inc; Linmor Technologies Inc; Lucent Technologies Micromuse; Minacom; NetTest; Nortel Networks Ltd; Orchestream Ltd; Spirent Plc; Sun Microsystems Inc; Microsoft Corp; Telcordia Technologies Inc;Teradyne, Inc; ViewGate Networks; and Visual Networks.

Frost & Sullivan is a global leader in strategic market consulting and training. This ongoing research is part of the World Operations Support Systems Subscription Service, which also includes the World OSS Billing Markets Report Service, and the World OSS Service Fulfillment Report Service. Frost & Sullivan also offers custom consulting to a variety of national and international companies. Executive summaries and interviews are available to the press.

World OSS Service Assurance Market Analysis Report: 6244-60

Contact Chad Blomberg, 210-247-3830, 210-348-1002, cblomberg@frost.com.