METASOLV LANDS U.S. TIER 1 ILEC WITH FRAMEWORK AGREEMENT

MetaSolv Software celebrated Columbus Day last week by landing on the shores of an American ILEC and executing a framework agreement for IP service activation. The deal, combined with a separate significant deal won by Syndesis last week, provides further evidence that the operations support system market is beginning to boil.

The new framework agreement is with one of the largest U.S.-based ILECs and is in support of service activation for the carrier's IP-based service offerings. Initially, MetaSolv will provide solutions for the carrier's Internet and MPLS-based IP/virtual private networks (VPNs). The strategic framework also calls for future support for enterprise and consumer voice over IP (VoIP) and other IP-based services.

“This is a demonstration of our leadership in a hotly contested area,” said David Sharpley, senior vice president of marketing and product management for MetaSolv.

MetaSolv's service activation solutions have been deployed by more than 75 operators in more than 26 countries, including Brasil Telecom, BT, Cable & Wireless, O2, T-Mobile and Vodafone. MetaSolv claims its solutions support approximately 200 million subscribers globally across multiple network technologies.

While the IP/VPN market continues to grow and is the initial focus of this implementation, the framework agreement covers all services over IP potentially including IPTV. OSS Observer has reported that global IPTV subscribers surpassed 1.7 million users earlier this year and forecasts that number to grow to 28 million by 2010, with North American carriers leading the charge.

Subsequently, the need for IPTV OSS functions, such as activation, will grow from $84 million this year to $760 million by 2010 with the real upward curve starting around 2007.

Larry Goldman, founder and analyst at OSS Observer, said MetaSolv has been winning a lot of deals in a market with much higher volume than IPTV, and that's VoIP. Comparing MetaSolv's recent success with competitor Syndesis' announcement last week of its $40 million contract with another North American carrier for service delivery management of IP services, Goldman said, “Syndesis winning deals doesn't mean that MetaSolv is being shut out; MetaSolv is winning more deals in a market that is really happening now. There's lots of volume in VoIP right now.”

The two companies have technologically different approaches to solutions such as activation, Goldman said, and service providers make philosophical choices early on in the evaluation process as to which philosophy to pursue.

Sharpley said the deal is multi-year and has the potential to be multi-million as commensurate with deals with carriers of this size. “It's not just theoretical,” he said. “We have people deployed, and we have already received orders against the agreement.”

MetaSolv will hold its next earnings call on Oct. 27 for the quarter ending Sept. 30. However, last quarter the company reported a revenue increase of 18% compared with the same quarter in 2004. In the last two months, MetaSolv announced another North American Tier 1 provider as well as a European cable provider for IPTV activation services.

It also recently announced a breakthrough in the Asian market by selling China's largest incumbent telecommunications service providers on its ordering and inventory management solution.

As with other recent announcements in the OSS space, particularly in the U.S., carriers are staying mostly mum on their choices of independent software vendors. “When you are their secret sauce, customers don't want people to know you,” Sharpley said.

Recent MetaSolv deployments