The key drivers for adoption of next-gen OSS and LSO stem from both new end-user requirements as well as the competitive environment for CSPs. Next-gen OSS and LSO market drivers include pressure from Over-the-Top (OTT) services that compete with the CSPs’ own value-added offerings, business demand for faster turnaround times and more flexible service turn-ups, and a need to launch more profitable, innovative services within the CSP markets.
Next-gen OSS and LSO Market Drivers #1: Co-opetition with OTTs and CSP Transformation Challenges
CSPs have described a broad cultural shift in which they are trying to change their organizations to make them agile so that they operate more like Cloud operators (Amazon, Google, Microsoft, IBM and others). These Cloud operators quickly adopted open virtualization technologies to build flexible cloud infrastructure foundations, which have allowed them to build significant scale at much lower cost than traditional IT approaches would have allowed. CSPs recognize that to combat these Cloud operators, many of whom operate popular OTT services that compete with the CSPs’ own value-added offerings, CSPs have to become more like Cloud operators.
Just as CSPs have transformed in the past from wireline providers to wireless providers and then again to data service providers, they need to evolve again. This next step includes incorporating cloud platform architectures and changing their DNA to operate more like Cloud operators. The competitive pressure to lower costs while driving revenue has become more critical with the rise of competitors like Amazon, Google, NetFlix, HBO, offering value-add services over CSPs’ existing wireline and wireless networks. Some CSPs are contemplating and exploring collaborating with the OTT service providers, investigating revenue share opportunities, or providing premium transport for selective services (while tap-dancing around net-neutrality in the United States).