l Industry Lifecycle Stage Models The models in contemporary research literature can be used to model software industry evolution. The models include the industry lifecycle theory (Gort and Klepper 1982) and the theory of vertical specialization and integration (Macher and Mowery 2004). An analysis using the industry-specific vertical software market evolution model (cf. chapter 4 on "Model for Evolution of a Vertical Software Industry") will be presented in Sect. 3. These theories supported by some empirical observations, can clarify the following stages of the development of the telecom- munications industry and the vertical software market. A. Early stage. Traditionally, CSPs have internally developed and maintained the software required to run their operations. Until the 1980s they only provided voice services over fixed telephone lines and at that time the telecommunications opera- tors were largely national incumbent firms. All the necessary operations were conducted within the CSP, that is, the operations were vertically integrated. The needed operations software was developed within the CSP for its specific purposes and network infrastructure. In the 1990s, the markets were liberalized and new communications services, including mobile communications were added to the CSPs service portfolio. Still, the services were mainly operating on top of their own specific technologies and operations supporting systems. By that time, CSPs started focusing more on their key competence area, i.e., communications, and consequently outsourced software development and maintenance to software vendors or ICT service providers. As a result of this, a new software market was born. In the first stages of the OSS/BSS market, only a few firms were operating in the market, which is in line with the mentioned theories and models. In the case of telecom software, these firms were typically founded by outsourcing the operators' software production. These few firms provided software for most of the operators' operations. The OSS softw