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

ARMONK, NY - 29 Jul 2009: IBM (NYSE: IBM) today announced independent analyst firm OSS Observer, an Analysys Mason company, has ranked IBM as the worldwide leader in the telecommunications service assurance software market (1), marking the second consecutive year OSS Observer ranked IBM as the overall leader in this space.

According to the report, service assurance spending is forecast to grow from $2.28 billion in 2008 to $2.94 billion in 2013 at 5.3 percent CAGR. IBM is the largest commercial supplier of service assurance solutions at 12% market penetration, said the report, and has a leading position in the fault, performance, and service management segments.

OSS Observer’s June 2009 Server Assurance Market Review noted that although the current economic crisis is impacting the entire service assurance software business, “IBM is well positioned to take market share from weaker competitors as it leverages its position of strength in the managed service business. IBM is also clever in developing opportunities that benefit the Tivoli Netcool business.”

 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. According to the firm, the main factors driving service assurance spending today is the need to measure customer experience quality.

 The report also noted that IBM continued to outpace competitors in two key segments.  IBM claimed the number one spot in the Fault and Event Management for operations support systems space with a 32 percent market share penetration, a 1 percent increase from the previous year. This market, expected to grow from $525 million in 2008 to $590 million in 2013, includes fixed, mobile and broadband segments. IBM also topped the Performance Monitoring market unit with 23 percent of that space, a 3 percent increase since the 2008 report. The Performance Monitoring market is predicted will grow from $347 million in 2008 to $451 million in 2013, a CAGR of 5 percent.

 “IBM has been able to successfully transition the telecommunications software businesses it acquired into the Tivoli business unit and still maintain its focus on the telecommunications market without much disruption to the large existing Micromuse and Vallent customer base,” said analyst Patrick Kelly. Three years ago, IBM had little to no presence in the telco service assurance software market and in a short time has taken the lead, bolstered by its strategic partnerships with major networking and service providers and the strength of its software and services. 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, IBM has been able to grow faster than the overall growth of the service assurance market.

 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/

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