As carrier focus moves from cost savings to new revenue generation, horizontal next-generation service delivery platforms (NG SDPs) are becoming a strategic focus area for them. The market for NG SDPs consists of a large variety of vendors addressing the market from different angles according to varying carrier demands. Deploying an end to end NG SDP requires a combination of IT, telecom and system integration skills and products. Accordingly, the current SDP market can be described as a melting pot of IT players, network equipment providers (NEPs), system integrators (SI) and independent software vendors (ISVs). These players work together as part of a vendor ecosystem to try to drive this embryonic market and their own business.

Despite the work of numerous standards bodies and the existence of a lot of discreet standards and interfaces, there are no common implementation rules and standard definitions from which to build a common NG SDP environment. NG SDP is a system integration game and will remain so for the near future. The good news in the seemingly chaotic world of NG SDP is that a number of key functionalities are emerging as common definers of the space and the carrier requirements and NG SDP ecosystems are starting to take shape.

This report analyzes the recent performance of 19 significant vendors serving the SDP market and rates each based on our vendor scoring definitions. We also provide an overall market scoring using the same definitions.

• The current NG SDP focus is on migrating existing services to Internet protocol (IP) and "NG" platforms. This benefits the NEP rather than IT vendors.
• Due to the complexity of the solutions and carrier demands, system integrators will continue to play a key role in turning NG SDP into a success.
• No single company offers all the necessary skills and products for an end-to-end NG SDP. IBM and Ericsson currently have the most complete offerings.
• At the highest level, the key NG SDP capabilities are: network and IT system integration, network, device and operations support systems (OSSs) abstraction, third-party abstraction, application creation and execution, common enablers and management — including orchestration.

• Carriers who are reluctant to invest in a more agile service delivery environment for the creation and delivery of innovative new services will fail to attract new subscribers and maintain profitability during the next ten years.
• As focus moves to new revenue and new customers, the IT-centric vendors will gain power and that set of skills will become more crucial.
• Carriers will not buy end-to-end solutions from one vendor (not available today anyway), but they will start to see the value of pre-integrated solutions.

Carriers

• Carriers that act swiftly to implement NG SDP-based coherent step-by-step migration plans will gain strong competitive advantages in the long-term.
• Carriers should keep in mind that no vendor alone will manage the complex challenges imposed by NG SDP. Various vendors approach the market from different angles and will therefore have significant differences in capability.
• Carriers should work with existing vendor ecosystems. It does not make sense to force unnatural ecosystems.
  

Vendors

• NEPs are well-positioned in the early market with existing service migration. Good partnerships with IT companies will be essential to compensate for lacking IT skills and expertise, especially for the future.
• Vendors need to provide large application libraries and focus on third-party content creation in their NG SDP offerings. The capability to turn around this weakness in today's solutions will be the key factor for future success.
• Successful service delivery platform (SDP) vendors need to provide strong elements of consulting, implementation and support services, or partner with integrators.

The emerging market for NG SDP solutions breaks down traditional barriers between IT and telecommunications. Neither sector alone can master the complex challenges imposed on carriers to create, deploy, deliver and customize any type of service independent from the type of network, device and location. The immediate carrier focus is on migrating the existing revenue-generating services to new cost-effective and flexible platforms. Consequently, traditional network equipment providers, based on their strong footprint with major carriers around the world, have an opportunity to shape the evolution of the SDP market. They can do this while considering their proprietary network rights and extensive knowledge connecting telecom applications with carriers' network resources.

A number of new entrants are moving into this market and are seeking to expand their expertise from the IT and enterprise market and into telecommunications. When the focus of telecom carriers switches from cost savings and applications to an emphasis on new revenue creation, these companies have a chance of becoming new influencers.

Overall, the market for SDP solutions is approached from a number of different providers:

• Network equipment providers
• System integrators
• IT houses
• Software infrastructure providers

The fact that the vendors in our scorecards are approaching the NG SDP market from different angles makes it challenging to perform an "apples to apples" comparison. Accenture, Capgemini, and Tata are system integrators. HP and IBM are world-class system integrators, but IBM is also an infrastructure and IT vendor; HP is also a network equipment vendor. Ericsson is a world-class SI but mainly a NEP. Nokia Siemens Networks is a NEP, but also has significant SI skills — as does Alcatel-Lucent and others.

In the meantime, NG SDPs are a complex system integration exercise that favor companies with SI and methodology skills. When making purchasing decisions on SDP suppliers, carriers need to carefully assess the capabilities of various vendors, considering the full scope of required evolutions and the underlying technologies, as well as its impact on OSS. The lines between traditional OSS systems and a common SDP are becoming more and more blurred. For example, rating functionality for pre-paid mobile used to be a traditional part of OSS in the legacy world, but has now become a key part in the process of mobile service delivery for pre-paid services. Today, vendors include typical OSS functionality as an integral part of their SDP offering.

This market overview and strategic scorecard study supplies carriers with a scorecard to evaluate the leading NG SDP approaches and start making informed sourcing decisions.

Most carriers have numerous service delivery platforms. However, these are typically dedicated vertical silos built on proprietary technology. They are not cost-effective and do not allow mixing of applications. The idea behind NG SDP is to use a new approach that is horizontal, is as much standards-based as possible and can be shared across a number of end-user applications or services. The idea is to start building an "application network" on top of the "connectivity network." Existing carrier networks are unique in their mix of vendor- and carrier-developed technology and interfaces. There are no consistent definitions for NG SDPs in the industry today — there is no common industry view on what specific components should be included or not. Each vendor builds its offerings around its key strengths while integrating modules from its own organization or partners.

This research adopts a pragmatic view of NG SDP. We look at the areas that need to be solved by carriers (or for carriers) as they evolve their service delivery. This spans from the "connectivity network," OSS/business support system (BSS) and third-party interfaces to service creation and execution and common service enablers that can be combined and reused. Consequently, the research considers offerings that range from session initiation protocol (SIP) servers to complete architecture visions that vendors may call service delivery platforms or service delivery frameworks.

Gartner's general information on carriers' overall transformation and NG SDP requirements was paired with information from NG SDP-specific workshops and client enquiries that Gartner has handled. We also utilized vendor interviews and meetings and conducted a dedicated vendor NG SDP survey.

Vendors were scored on seven criteria used in Gartner deliverables on a scale of 1 to 5, with 1 being the highest and 5 being the lowest. Each of the criteria is weighed, with a medium, high or low weight for the scoring.

Criteria 1: Product Portfolio

• Core goods, services and skills offered by the vendor for NG SDP.
• Weight: High.

Criteria 2: Product Strategy

• The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and particularly future requirements.
• Weight: High.

Criteria 3: Market Understanding

• Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.
• Weight: Medium.

Criteria 4: Geographic Strategy

• The vendor's strategy to direct resources, skills and offerings to meet the specific needs of global geographies either directly or through partners, channels and subsidiaries. Scored "low" for the overall assessment so that regionally focused vendors are not penalized.
• Weight: Low.

Criteria 5: Sales Strategy

• Completeness of go to market model as expanded by partners.
• Weight: High.

Criteria 6: Track Record

• Deployments so far.
• Weight: High.

Criteria 7: Overall Viability (Business Unit, Financial, Strategy, Organization)

• Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products.
• Weight: Low.

The following section is a short comparative vendor discussion for each of the key criteria outlined in Section 2.

In reality, most NG SDPs will get deployed in modules and will certainly be multi-vendor environments. It is a useful exercise to compare the product, service and skills of different NG SDP vendors because carriers value comprehensive experience. When all the different product capabilities that are required to build an NG SDP are considered — network, device, third-party and OSS abstraction, service creation and execution, common enablers, orchestration and management — three companies currently stand out: Ericsson, IBM and Accenture. These three can be considered the early market pioneers. They have the broadest, advanced SDP product portfolio, coupled with strong system integration and next-generation services consulting expertise. Of the three, Ericsson has the largest indigenous product offering, IBM is the "grand old daddy" with the most established NG SDP approach and a high content of own products. Accenture has a formidable footprint in the market. Its NG SDP offering is mostly third-party based.

Not surprisingly, Ericsson, Accenture and IBM are leading the overall market from the product perspective and are also leaders in terms of market understanding. They have exposure to the real-world issues that their clients are facing. Additionally, Microsoft and Nokia Siemens Networks are companies that we rank higher than the rest in terms of overall market understanding. Microsoft has a huge presence in end-user applications, which reflects its thorough market understanding. Nokia Siemens Networks is currently pulling together an end-to-end offering comprising fixed-mobile, device, network, IT and applications domains. These companies truly understand carriers' NG SDP requirements regarding next-generation services, business and operational processes, as well as architectural issues.

The majority of vendors in this report score "strong" on product strategy. That means that most players in this market have a strong vision for mapping their product development and delivery plans to future requirements in the market. Accenture, IBM and Ericsson score very strong on these criteria. These three companies stand out because of their strong integration capabilities and the most comprehensive end-to-end solution product strategy. They appear to be the most convincing of all vendors in providing a gradual, long-term migration plan for a full blown NG SDP. This migration plan assists carriers in mitigating risks and improving operational efficiency while implementing new SDP components in existing legacy environments over time.

Our evaluation of geographic strategy is based on how many resources vendors allocate to specific regions outside their home base to support customers' NG SDP requirements. The three leaders in this category are identical with the leaders in the NG SDP product portfolio category. Accenture, Ericsson and IBM all have strong geographic traction with reference implementations in all regions. Moreover, these vendors have test labs, partner support and own integration capabilities in all geographic regions. Some vendors in this survey tend not to allocate sufficient resources to regions outside their home base. These rather locally-focused vendors score "some risk" because they might not be able to meet the specific needs of customers in other geographic regions directly, or through partners, channels and subsidiaries.

This criterion is based on a vendor's go-to-market model. Ericsson, BEA and Sun stand out on the basis of their capability to build an appropriate network of direct and indirect sales channels to increase the scope and depth of market reach. They all have well-segmented and well-targeted go-to-market strategies and a global partner network. The ones that score "some risk" have weaknesses in building an extensive network of significant partners or channels to increase their market reach. Microsoft is a challenging partner because of its market power.

Accenture, Alcatel-Lucent, Microsoft, IBM and BEA have a strong track record in terms of deployments so far. Ericsson has the largest number of extensive NG SDP implementations and therefore scores "Very Strong." This leadership position relates to the fact that most SDP implementations are in the mobile space, where Ericsson has a strong traction. All of these companies stand out in terms of their ability to respond to market requirements and prove their capability to actually deliver their vision. This result is not surprising because the NG SDP market is an emerging one, meaning it is still quite limited in terms of opportunities. This will change when the market picks up. However, this early market success gives a good indication in terms of the vendors' competitiveness and who is likely to lead the way in the longer term.

The overall viability of the companies in the NG SDP space takes into consideration their revenue in the market so far, as well as the commitment they have made in terms of NG SDP investments. We also consider the likelihood that the companies will continue to develop their NG SDP capabilities. Most vendors score either "Stable" or "Strong."

The overall analysis of the NG SDP criteria shows that the majority of NG SDP vendors have a strong vision for NG SDP. Most have innovative product road maps anticipating future market evolution and carrier requirements. However, we observe a gap between the reality of putting adequate products together and delivering them to the market today against the vision.

Given the relatively early days of the market, there are very few vendors that have a strong track record (see Table 1).

Along with IBM and Ericsson, Accenture is one of the NG SDP overall market leaders. It has a strategy and a process-led approach to NG SDP, and the service delivery platform is marketed as part of the company's overall communications solutions for service providers. Accenture offers a complete service delivery platform that is comprised of partner products (BEA, Oracle, Microsoft, Alcatel-Lucent and EMC being the most important) that the company is integrating into an end-to-end NG SDP. Accenture is one of the pioneers of NG SDP and has made one of the largest resource investments toward the new market in the industry. It has global industry solutions centers for NG SDP designs, building and maintenance, and also one of the largest SDP footprints, with more than 10 deployments.

The company's main capabilities are in IT integration, processes and consulting, all of which are crucial success factors for NG SDP. Moreover, Accenture will be able to leverage its strong presence in the OSS professional services market with numerous next-generation OSS transformation initiatives with carriers worldwide. Its OSS product framework encompasses an end-to-end service fulfillment and service assurance product portfolio in partnership with all the major OSS ISVs globally.

The biggest challenge for Accenture is its lack of any tie to the network domain. The company relies on closer collaboration with partners, especially NEPs, as well as the acquisition of internal knowledge.

The Alcatel-Lucent service delivery environment is a complete NG SDP architecture blueprint that covers application domains like IP Multimedia Subsystem (IMS), fixed mobile convergence (FMC), enterprise collaboration, Internet protocol television (IPTV) and mobile TV, as well as integrates legacy or other products. For example, Alcatel-Lucent products include a blended IMS/Web services application server, network and third-party abstraction gateways, as well as convergent payment and subscriber data management. Alcatel-Lucent is well positioned in IPTV and is credible as a network and IMS core system integrator. It is partnering with the leading IT solution providers and ISVs for additional functionalities such as orchestration middleware and IT systems (see Table 3).

The Alcatel side of the company brings to the table assets around FMC, "triple play" and next-generation OSS, while the Lucent element complements with a strong IMS solution and innovative network-based enablers for blended services. It also provides core competences in the network management and service assurance space. Both companies traditionally add strong system integration capabilities. While Alcatel had good network SI capabilities, Lucent's worldwide services add significant integration capabilities, particularly in the United States.

Alcatel-Lucent's service delivery environment (SDE) implementations cover the IMS, IPTV, enterprise collaboration and multimedia content space. Its traction is mostly U.S.-based, with some deals in Asia/Pacific and Western Europe. The main challenge for the company is IT integration, for which it partners closely with most major IT vendors, including BEA. While Alcatel-Lucent will need to build more applications and services in the future, it is the Alcatel-Lucent SDE blueprint that enables the third-party on boarding that will bring service providers those new applications and services.

Avaya-Ubiquity's NG SDP offering is based on the acquisition of the Ubiquity session initiation protocol (SIP) application server (see Note 1). The offering also consists of a SIP service-oriented architecture (SOA) service-creation environment and orchestration, and a SIP application development tool. Ubiquity SIP servers have been a favorite for many NEPs and service providers because they offer open modules. It has one of the largest footprints of any telecom SIP server in terms of units shipped and is deployed in some significant carriers including BT Group, Bell Canada and AT&T. The company's developer ecosystem ubiquity developer network (UDN) is substantial and well regarded for telecom applications. Additionally, given Ubiquity's relatively narrow focus, it has been able to partner with Microsoft and benefits from Microsoft applications and Microsoft.NET. Avaya-Ubiquity is one of the leading enterprise vendors and is well positioned for SOA enterprise services. However, when it acquired Ubiquity, many industry participants became uncertain about the future position of the solution and overall uncertainty around Avaya-Ubiquity has not helped things. Given Avaya-Ubiquity-Ubiquity's narrow product portfolio in the NG SDP space, it is very reliant on partners. NEP relationships are now cooler than before and most of the company's SI partners are not tier-one players (with the exception of HP, which currently uses Avaya-Ubiquity as an IN solution partner). The key applications that Avaya-Ubiquity has in live networks are VoicePlus (a consumer voice over IP [VoIP] white label offering) and Speak (an integrated multimedia conferencing white label offering). Table 4 shows Avaya-Ubiquity's position as an SDP vendor.

While not offering a complete end-to-end NG SDP solution, BEA is a strong NG SDP enabler. Its BEA WebLogic Server is widely deployed in the telecommunications industry as an enterprise Java EE application server. AquaLogic provides process management and orchestration capabilities. The company is well-positioned on OSS/BSS middleware through the Tuxedo platform. BEA is trying to build on this presence and extend it to the NG SDP with its converged Java EE SIP application server, BEA WebLogic SIP server. The other cornerstone of BEA's NG SDP offering is the BEA WebLogic Network Gatekeeper, which is deployed by carriers mainly for partner policy enforcement and network abstraction; it also provides third-party partner management functionality. BEA also offers service orchestration, process management and user presentation frameworks. BEA has a global footprint and has been investing in Asia, especially in South Korea and China.

BEA is not an applications company. While this means that it does not have "applications pull" in the market like Oracle or Microsoft, it also means that BEA can be a neutral, and "safer" partner from the perspective of application ISV companies. BEA has a close partnership with BroadSoft for hosted private branch exchange (PBX), IP Centrex, business trunking and residential VoIP applications. BEA has a strong application developer ecosystem for enterprise applications and OSS/BSS, but needs to strengthen and grow its telecom and Web 2.0 type application developer and ISV partner relationships.

BEA relies on NEPs for network expertise. BEA also relies on SI and NEP partners for system integration. So far, its closest relationships have been with Ericsson and Accenture, but BEA has also worked with HP, Nokia Siemens Networks, Huawei, Italtel, Nortel and NEC. Table 5 shows BEA's position as an SDP vendor.

Cisco's service exchange framework (SEF) includes deep packet inspection, content filtering and control solutions that can be exposed based on carrier-defined policy. The solutions correspond to the network abstraction and the OSS/BSS abstraction functionality of the NG SDP. In terms of NG SDP-related capabilities, Cisco also has a softswitch offering and video capabilities from the Scientific Atlanta acquisition. Cisco's solution interfaces with network elements and third-party developed applications and back-office systems. Cisco both integrates the solution and uses system integration partners such as Accenture, Italtel, IBM and Dimension Data.

Cisco has developed the following carrier facing applications on top of the platform: peer-to-peer (P2P) traffic management, video traffic management and distributed denial of service protection. Cisco's end-user facing applications are unified communications and IPTV related. Cisco's application partners include Italtel, Personeta and Adaptive Mobile.

Cisco, along with Juniper, is a routing leader and therefore plays a very meaningful role in ensuring the performance and quality of service in service provider networks worldwide. The biggest challenge is carrier fear of vendor lock in. The platform only works on Cisco routers and switches, and Cisco is bundling more functionality in the core of the network. It needs to get more partners interfaced on top of the platform for the rest of the end to end NG SDP functionality. Table 6 shows Cisco's position as an SDP vendor.

Ericsson is leading the worldwide market for NG SDP implementations based on its track record — strong system integration and consulting capabilities and the most complete end-to-end SDP in terms of its own product capabilities.

Ericsson is the worldwide mobile infrastructure leader and relatively well positioned in the fixed-carrier infrastructure market as well. The NG SDP market has so far been more about the evolution of existing services, so it is not surprising that Ericsson is well positioned. Beyond the installed base of telecom company infrastructure, Ericsson's key expertise is to connect applications and services with network resources as well as broad OSS/BSS integration capabilities. Moreover, its market leading global services organization applies the crucial holistic approach toward next-generation service delivery architecture integration.

Compared with other NEPs, we estimate that Ericsson has so far invested more resources into the NG SDP space. It is further along the path to having the internal organization in place to support all the necessary aspects of a NG SDP. Ericsson has the largest number of NG SDP reference implementations worldwide and has already proven that it is able to deliver its vision to the market. At the same time, the company's new multimedia division is not yet "firing on all cylinders." It has made acquisitions such as Drutt, a mobile operator-focused SDP management and orchestration provider, and NG SDP-related companies, including video specialist Tandberg TV and billing company LHS.

The company is very strong on IMS and telecom company services, but for the future "Telco 2.0," it will need more partners beyond the Ericsson Mobility world (the mobile-focused external developer ecosystem). Ericsson is not an IT company and partnerships and added skills in this area will be an important area for the company to work on for the future. Given the increasing focus of vendor independence, Ericsson NG SDP needs more partners overall. Table 7 shows Ericsson's position as an SDP vendor.

The SDP market provides a services-led opportunity for Capgemini. The company doesn't have any of its own products, but offers a combination of telecom and IT consulting and technology skills. Capgemini offers a breadth of technological capabilities, architecture skills, end-to-end integration as well as BSS/OSS/network integration capabilities. These system integration skills are crucial to amalgamate commodity hardware and commercial off-the-shelf software for carriers to be able to evolve to next-generation service delivery.

Capgemini is building a regionally strong end-to-end NG SDP. The company's focus and market success is concentrated in particular on Europe, the Middle East and Africa (EMEA) and, to a lesser extent, also on the United States. The company has a strategy laboratory where it aims to marry the Telco 2.0 vision with technology vendors. Capgemini has three Tier 1 NG SDP references and works with a narrow, but world-class, portfolio of partners. It has not invested as much in NG SDP as the leading players in the market. The company will need to convince the market about its commitment to the NG SDP space and needs a closer tie in to the core network layer.

Capgemini scores as "promising." Table 8 shows Capgemini's position as an SDP vendor.