Authors:
Oleksiy Mazhelis
1
;
Pasi Tyrväinen
1
and
Jarmo Matilainen
2
Affiliations:
1
University of Jyväskylä, Finland
;
2
Mikkelin Puhelin Oyj, Finland
Keyword(s):
Vertical integration and disintegration, software implementation efforts, market polarization, telecommunications software, operations support systems, business support systems.
Related
Ontology
Subjects/Areas/Topics:
Embedded Communications Systems
;
Enterprise Software Technologies
;
Software Architectures
;
Software Economics
;
Software Engineering
;
Telecommunications
Abstract:
A vertical software market is usually subject to the process of disintegration resulting in a market where different layers of software are provided by independent software vendors. However, as argued in this paper, the process of this vertical disintegration may be affected by high investments to software interface implementation and maintenance. Should the required efforts be large, the threshold for entering the market increases, thereby hampering the vertical disintegration process. This study examines the impact of the interface implementation efforts on the vertical market evolution in the case of the so-called operations support systems and business support systems (OSS/BSS) software, which are employed by the telecom operators in order to support their daily operations. The efforts are compared for two prototypical software vendors serving incumbent operators and new operators respectively. Total efforts are an order of magnitude larger in the former case. Furthermore, even i
f only latest network protocols are taken into account, the efforts are significantly larger in the former case, therefore requiring several times greater number of employees to implement them. Therefore, a conclusion is made that the OSS/BSS market is likely to polarize into the vertical submarket of large software vendors serving incumbent operators, and the submarket of small vendors serving young operators. The latter submarket, due to the lower entry threshold for new vendors is more likely to be vertically disintegrated.
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