IBM Turns Up Heat on Telecom Management Rivals
Underscoring the 25 percent growth reported on Jan. 18 by IBMs Tivoli unit in its fourth quarter results is a strong push by IBM into portions of the telecommunications market.
Coming up close on the one year anniversary of IBMs $865 million acquisition of Micromuse, IBM has seen "incredible growth rates" from that acquisition, which yielded a strong customer base among telecommunications carriers and services providers, said Wally Casey, vice president of sales in the Tivoli unit in Austin, Texas.
Such growth has allowed IBM to surpass Hewlett-Packard in the fault and event management segment of the telco market for the first time, according to new market research from OSS Observer, a telecomm market research firm in Dover, N.H.
"We see IBM now as the leading supplier for fault and event management in the telco software market. IBM has 19 percent and HP is just behind them at 18 percent," said OSS Observer co-founder Patrick Kelly.
Trailing those two vendors is Telcordia at 17 percent and EMC with its Smarts acquisition at 9 percent of the $600 million market, according to Kelly.
Casey maintained that IBM is growing faster than the market by taking share away from rivals such as HP. In that vein, IBM today announced that it has displaced HPs OpenView Network Node Manager at Integra Telecom, a Portland, Ore., telco that services the western United States.
Integra Telecom, following its acquisition of Electric Lightwave, found itself with both HPs OpenView and IBMs Netcool. In the evaluation it undertook to centralize on one fault and event management system, Integra found that "IBM had additional functionality that HP didnt have and it was at a lower cost than HP OpenView," said Integra CIO Julie Rouzee.
"I believe [HP is] a little behind on being competitive. They had a product we were interested in, but it was not available in the market [when Integra Telecom did its evaluation]," she said.
The rivalry between IBM and HP will only intensify, believes Kelly. "With IBM, because they are concentrating in the service assurance market, they are becoming a greater threat to traditional suppliers. The intensity between HP and IBM has gotten much greater in last year to 18 months," he said.
Beyond its success in the fault and event management space with Micromuse, IBM has made several strategic acquisitions aimed at broadening its presence among telcos.
In the last 18 months, IBM also acquired CIMS Lab, DataPower, DWL, iPhrase and Isogon as a part of its telecom growth strategy. And by the end of February IBM will close its acquisition of Vallent, which will bring key wireless performance management to IBMs portfolio of service assurance software.
CIMS Labs brings billing capability for large Unix servers; Isogon provides tracking of license compliance; DataPower provides federated identity management; DWL provides customer integration middleware; and iPhrase provides enterprise search and content management for IBMs information as a service strategy.
The move by telco and service providers away from traditional analog networks to IP-based infrastructures supporting new types of services is fueling spending as those organizations look to deliver highly available and secure services over an infrastructure that does not have the same track record of reliability as the traditional PSTN.
"As these service providers are looking to reduce costs and insure their service assurance, they are moving to a new set of IP technologies that they have to count on that have not been established with this level of service assurance before," said Casey.
OSS Observer projects that the market for service assurance alone among telcos and service providers will grow 9 percent annually between now and 2011.
"In 2011 the market will be greater than $3 billion," said Kelly.
Today OSS Observer pegs that market at just over $2 billion. Within the service management segment of that market, OSS Observer expects growth of 20 percent annually from $175 million today to over $500 million in 2011.
Although IBMs Tivoli unit is now focused on integrating its acquisitions and growing those businesses, Casey did not close the door on other potential acquisitions in the telecom management space.
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