Robert Rosenberg, president of Insight Research, said the research uncovered substantive changes since the last report in 2005 when the software segment was still mired in the downturn. “In order for OSS spend to occur, the carrier revenue has to show a certain trajectory. You can’t, for very long, spend more than you make,” he said.

Belkin concurred. “During the boom years, we were seeing a lot of investment in OSS and services that was way ahead of revenue,” she said. “We don’t see that anymore. We see spending according to revenue and budgets—and that makes it real.”

The research has identified several opportunities for software vendors upon which to focus over the next five years. They are: Internet-based and unified billing for multiple services, mediation platforms, RF planning tools, access network planning and tools for gigabit Ethernet, IP and wavelength management, inter-carrier billing and customer self-management. Those that provide the quickest return on investment will be on carriers’ short list.

While there will clearly be big winners in this space, they won’t be doing it alone, Belkin said, because partnerships will be more important than ever. And those partnerships will not be the static sort of lineups seen at the turn of the century. Vendors will need the flexibility to continually remake partnerships based on the specific needs of a service provider. And behind them all is the need for a quick time to market.

Service providers may find themselves embracing the system integrators they have spent the last five years trying to eliminate with demands of flow-through processes and plug-and-play systems.

“Partnerships are a very big deal,” Belkin said. “It is very important that vendors can work together to do pre-integration.”

Partnerships do more than bring two software solutions together, Belkin said. They also help vendors address new markets, and the opportunity over the next five years is in new markets. By 2012, the Asia Pacific region, thanks to China and India, will account for 35.8% of all global OSS sales. The majority of that will be in systems that support wireless networks and subscribers.

“There is huge opportunity internationally, and vendors need to pay attention to that,” Belkin said.

The North American market will still account for the same 25% it does today, but its CAGR will be only 6%, while Asia/Pac grows at 13.1% and Latin America and the Caribbean grow by 15.2%.

“The U.S. thinks of itself as the center of the universe, but the 21^st century will belong to Asia and India, with the economies that have been unleashed there,” Rosenberg said.