Last week at Mobile World Congress in Barcelona, I launched The Rayno Report’s latest premium research report on Lifecycle Service Orchestration (LSO), a developing market we project to be worth $2.75 billion by 2019. You can see the SlideShare of the presentation here.
What is LSO? Yes, it’s another buzzword — but we’ve also shown it’s a real market. As Axel Clauberg, VP in the CTO office at Deutsche Telekom AG (NYSE: DT), quipped on the floor of MWC: “If you were in Amsterdam or Denver you might think it’s a new drug.” No, LSO is not a pharmaceutical. But many service providers think it’s the new operating software that has the potential to heal many of the business maladies that ail them in enterprise services, by providing customer-based provisioning of services as well as extensive workflow automation.
Here’s the basic problem, as demonstrated by a survey, “Emerging Dynamic ‘Third Network’ Services & the Role of LSO,” which The Rayno Report conducted with the MEF. In the survey, more than 60 service providers polled told us that their Operation Support Systems were washed up and in need of refreshment. More specifically, survey results indicate that 54.6% of operators regard their systems as “outdated” with a need to be updated or overhauled, and 60% said they were lacking a capability to launch new services in a cost-effective and time-effective manner.
The existing OSS infrastructure is a hodgepodge of non-integrated systems, often based on proprietary software, that don’t communicate well together. It also doesn’t provide a lot of automation or workflow integration. Operators don’t like that. They want one place where they can orchestrate, provision, automate, and monitor enterprise business services.
This is where the operators see LSO coming to the rescue. Think of it as new OSS “smarts,” or software super-glue, that helps them automate the provisioning and management of services using a new generation of open APIs and technology in the Software Defined Networking (SDN) world — including Netconf, YANG, ETSI MANO, and open-source programs such as OpenStack and Open Daylight. LSO will be the software layer that helps operators tie the networking infrastructure to business workflow necessities such as service orchestration, fulfillment, control, performance, assurance, usage, analytics, security, and policy.
The bottom line? Global operators told us that they need this stuff. Our research shows that spending is already starting to ramp, and service providers could migrate between 20% and 50% of their OSS spending to the LSO market over the next five years. In addition to some migration of existing OSS spending, I expect new “native” LSO implementations to grow fast as well. Overall, the potential market for next-generation OSS and native LSO software will reach $2.75B by 2019.