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IBM Moves to Number One in Service Assurance Software Revenue, According to Analyst Firm

Surpasses HP and Others for Overall Service Assurance Market, Maintains Lead for Fault and Event Management and Claims Top Spot for Performance Monitoring Revenue Share

ARMONK, NY - 06 May 2008: IBM (NYSE: IBM) today announced that independent analyst firm OSS Observer has ranked IBM as the worldwide leader in telecommunications software revenue for the overall service assurance market (1). This marks the first time OSS Observer has ranked IBM as the overall leader for this market.

Communications service providers rely on service assurance software to monitor the reliability of their service delivery to customers, tracking such key areas as network compatibility, proactively identifying and fixing problems before they happen and allocating additional resources to meet sudden spikes in demand. The software works in tandem with other key business areas of telecommunications, including customer service, billing and network management systems, for example.

IBM's strong growth was fueled by a dual strategy of growing IBM's existing business as well as quickly integrating and growing its strategic acquisitions of Micromuse and Vallent technology. Micromuse was acquired in February 2006 and Vallent in February 2007.

The report states, "IBM has been able to successfully transition the telecommunication software businesses it acquired into the Tivoli business unit and still maintain its focus on the telecommunication market without much disruption to the large existing Micromuse and Vallent customer base."

According to the OSS Observer, service assurance spending is forecast to grow from $2.3 billion in 2007 to $3.5 billion in 2012 at 9 percent CAGR. IBM is the largest commercial supplier of service assurance solutions at 11 percent market penetration, said OSS Observer, and has a leading position in the fault, performance, and service management segments.

According to the firm, the main factors driving service assurance spending are competition in mature markets to assure a positive customer experience, support of complex access networks, IP enablement, and a focus on improving the efficiency of the field workforce.

Also according to the report, IBM continued to outpace competitors to claim the number one spot in the segment of Fault and Event Management for operations support systems (OSS) which includes fixed, mobile and broadband segments. OSS Observer forecasts the fault and event management market will grow from $555 million in 2007 to $842 million in 2012, a CAGR of 9 percent.

IBM also topped the Performance Monitoring market segment, which OSS Observer forecasts will grow from $323 million in 2007 to $497 million in 2012, a CAGR of 9 percent. According to the firm, broadband, mobile access and backhaul data services will generate strong demand for this market segment.

"We expect IBM's market share to increase as a direct result of direct selling in emerging markets and expanding its base in accounts that it already controls," said Patrick Kelly, partner and co-founder of OSS Observer. "IBM also has a strong network equipment channel partnership. Further growth is projected from the IBM Global Services group which is expanding its managed services business and acting as the prime integrator in major transformational projects with customers."

IBM Tivoli Netcool software has been selected by more than 1,000 service providers globally. The software helps service providers ensure service quality, reduce operational costs and speed time to market. IBM software helps service providers address emerging opportunities in next-generation network transformation, fixed/mobile convergence, and IP Multimedia Subsystem (IMS) deployment.

For more information about IBM Tivoli Netcool software, visit http://www-306.ibm.com/software/tivoli/solutions/service-provider/

Contact(s) information

Libra White
IBM Media Relations
408-404-6786
libra@us.ibm.com

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1 OSS Observer, "Service Assurance Market Overview" by Patrick Kelly, May 2008.

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