They say the universe is speeding away from us in all directions at an increasingly accelerated rate. Perhaps the same force is what drives networking technologists to keep their feet on the accelerator in their daily lives, pushing capacity, speed, new service introduction and adoption at breakneck speeds.

If you've read this issue sequentially, you've already read about the speed at which new technologies such as EV-DO and HSDPA are being brought to market in the wireless sector. You've read about the fervor of carriers in introducing video and driving the VDSL2 standard. And you've read about the spontaneity with which service providers want to bring new services to market.

This need for speed is putting a lot of pressure on service providers to keep pace in their ability to anticipate and respond to network- and service-related performance issues. In other words, real-time service assurance has become more than a pithy marketing slogan; it's become a requirement. That's why you'll be hearing a lot about it this year at Supercomm. You may have heard a lot about it already; however, this year you may be hearing it from a different point of view: the customers'.

From Agilent Technologies, whose share of the $2 billion service assurance market is 14%, you will hear a lot about customer-centric service assurance. The company is responding to the shift by service providers to a more customer-management focus centered on their experience with individual services.

As service providers begin delivering complex services through a matrix of third-party content providers, there will be no finger pointing when something goes wrong. The customer won't tolerate being told to call Disney when a download fails. Customers will want to deal only with the company they signed up with, and Agilent has made a direct correlation between profitability and customers remaining with the company with which they signed.

“Market share has nothing to do with profitability; it's market position and customer loyalty that result in high profit margins,” said Karl Whitelock, marketing director of the operations support system group for Agilent.

You earn loyalty, Whitelock said, not by focusing on five-nines reliability in the network, but on a customer-centric process of detection, isolation and repair. And oh yes, your focus had better be real time.

The real-time aspect of service assurance will be critical for service providers to maintain customer loyalty. The term real time itself has been diluted by hyperbole over the years, much like the term plug-and-play, but companies such as Agilent are getting closer to re-establishing its meaning. Agilent monitors the signaling data of 60% of the world's voice traffic, and signaling data, unlike billing data, is what offers the best chance at real-time, customer-centric service assurance.

However, capturing the data is only one aspect of providing useful information to a service provider. “It's no longer about the status of the gear or what protocol is running, but how close you are to providing accurate information to the true decision-makers in the operations center [and elsewhere] about how customer experience is being affected by how your network is working,” said Thomas Pincince, president and CEO of Brix Networks.

It is in that process that the most honest definition of real-time can be found. “Real-time has become less of a feature differentiator for a product like ours and has really transitioned to being a description of the service that is under test,” Pincince said.

Service like video-over-IP and VoIP are as real time as it gets. Consequently, so is the ability for end users to notice differences in performance.

“The difference today with converged services is that with these new applications, the individual customer is uniquely qualified to determine quality,” Pincince said. “There is a lot of leeway in e-mail, browsing and Web services, but there is very little tolerance in terms of quality in voice and video. So this puts a unique challenge to service providers to understand how customers are viewing their services.”

Brix earned its stripes providing performance management and service assurance solutions for VoIP communications. However, this summer the company will be responding to what Pincince calls the tremendous new energy in video-over-IP and wireless services.

And so will a lot of other players in and around this service assurance space. In addition to the strategic focus driving companies like Agilent and Brix, there is another reason you will be hearing a lot about service assurance and its associated mechanisms such as event monitoring, performance monitoring and fault management this year. There has been tremendous acquisition activity in this space over the last six to eight months, and vendors are going to want to crow about what great moves they made.

Patrick Kelly, partner and co-founder of OSS Observer, said service assurance mergers and acquisitions activity led the market with $847 million in transactions in 2004, minus the Warburg Pincus/Providence Equity Partners acquisition of Telcordia.

It hasn't slowed in 2005 either, and the companies are paying some solid premiums for other players in this space. EMC acquired SMARTS, a fault and service management provider for $260 million in December 2004. Kelly said this deal raised the bar compared with other OSS vendor acquisitions over the last two years — EMC paid 4.3 times SMARTS' fiscal 2004 revenue.

“EMC's generous offer suggests it believes SMARTS will be able to grow in the range of 40% to 50% annually from now until 2008. We think EMC is overly optimistic,” Kelly said.

Yet optimism abounded over the next few months as Gores Technology Group, a leveraged buyout organization specializing in distressed assets, sold fault management provider Aprisma Management Technologies to Concord Communications for $93 million in January after having bought the company from Enterasys for an estimated $15 million or less in August 2002.

Concord was subsequently swallowed last month by systems management giant Computer Associates for $350 million, which was 2.36 times the company's 2004 revenue, including Aprisma's. Kelly said competitors in the OSS space will be champing at the bit to move in on Concord's territory, which he said will be ignored as CA redirects Concord's resources away from the telecom market.

However, Yogesh Gupta, chief technology officer of CA, thinks differently. “We have not played in the telco market segment primarily because it has been a very network-driven environment,” Gupta said at the time of the acquisition. “But when it comes to telco service management, [Concord] brings us very interesting opportunities.” Gupta cited Concord's 23 large carrier customers in this market and said, “To us, this is an enormous entry into that market.”

It will be interesting to watch how the acquisition is positioned by June.

Within a day of the CA/Concord acquisition, business and service management software company Micromuse bought Quallaby Corp. for $33 million. Quallaby had only about $7 million in revenue in 2004, but a recent — and potentially lucrative — deal with BT, which could generate as much as $10 million, may justify the premium paid by Micromuse.

Kelly said Micromuse must expand its product portfolio in the performance-monitoring segment to address the high-growth service management market. “The trend toward network convergence and consolidation of software systems will favor OSS suppliers with domain expertise in IP network and service assurance,” he said.

Pincince called the acquisition something else. “Micromuse/Quallaby was a consolidation play. EMC/SMARTS was a branching out play. And CA/Concord was a desperation play,” he said.

He added that there are too many vendors in this space and too many companies with undifferentiated products.

“We are seeing companies trying to buy revenue to hide the fact that there is low growth in their legacy product lines,” Pincince said.

We may hear different at Supercomm, but whatever we hear, it will surely be framed in the view of the customer and accompanied with a real-time chorus.

For more insight on Service Quality Management watch our Webcast, featuring OSS Observer's Patrick Kelly, available now at
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