Service Qualification Software Market Research
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By: Bruce Bahlmann - Contributing Author (your feedback is important to us!)

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According to Yankee Group forecasts, broadband data service in the US is growing at that rate of about 5 million subscribers per year. Average churn among broadband data providers is about two percent which results in an additional ~614k subscribers changing providers. As a result there is an opportunity to sell 5.614 million units of service qualification software within the US alone annually – at least through the year 2007. The current (2002) 19 million broadband users in the US represent roughly 6 percent of the US population and the 5-year projection is that up to 17% of the US population will have broadband subscriptions by the year 2007. If the US population represents 4% of the world population, the global annual market for service qualification software is approximately 126 million units – assuming the penetration and adoption rates worldwide resemble that of the US. Of course these assumptions are not the case so this figure is a best-case scenario. 

Service qualification software vendors receive anywhere from $0.50 to $1.50 per unit for their software. If we average this cost over all units sold the average costs of service qualification software is probably around $1 US per unit or less. So the worldwide market for service qualification software is around $126 million annually. How this revenue is divided up among vendors depends on the number of operators each vendor has sold to.

Table 1.0 Company and Associated Market Share Summary Information

In Table 1.0, the relative market share represents an approximation of the number of broadband service providers that have signed up with a particular service qualification software vendor. The actual share of the $126 million received by each vendor is dependent not only on the number of service providers each vendor signs up but also how many subscribers each of those vendors support. Since this information is not really available these numbers are only approximate. Note that a number of broadband service providers may use multiple service qualification vendors so a vendor may not be able to claim all of the broadband service provider subscriber numbers.

Invenstor, customer and product info:

Table 2.0 Investor, Customer, and Product Info

Interesting Links to Vendor White Papers:

ServiceWare - White Papers

Technical feature comparison of service qualification companies:

The following is a list of possible service qualification features as well as those that have been publically claimed (through websites, press releases, etc.) by the vendors below. This analysis merely represents a survey of possible features supported by different vendors - actual features that exist on shipping products by these vendors may vary.

Index:
X = Supported
O = Not Supported
? = Partially, not fully, or questionably supported

Technical feature discrepancies:

External factors that could reshuffle leadership among vendors in this space:

General questions I have for this industry are:

What happens after the gold rush? Once a majority of people have signed up for broadband what happens next? Service qualification vendors need to begin thinking of their second life after the gold rush where a majority of their income will not come from signing up broadband subscribers but from some other source. What will that source be?

Readers who use this information for investment purposes do so at their own risk! Opinions expressed are just that and not based on insider information or information otherwise obtained illegally.

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