Where are the bright spots in IP telephony? There are quite
a few. I believe we will see some companies do very well in the next six
months. These are the companies that are still investing in R&D as well as
marketing. Many of the newer companies in this space have managers that are
too inexperienced to guide their companies through these tough times. If you
are looking to invest in technology, look for at least two of the following
ï¿½ A solid company that has been around for at least five years or
is majority owned by a company that has been around for just as long.
ï¿½ A company at least breaking even or with enough cash to get them
through this downturn. In other words, they have real, paying customers.
ï¿½ A company that puts out frequent press releases about new customer wins
as well as making a concerted effort to market their products.
(The last point may seem like a conflict of interest coming from a
publication that is 100 percent advertiser supported. Still, for a better
understanding of my viewpoint, please read the sidebar entitled Marketing
I started to think about all of this recently when I came across two
companies that are holding their own in this market, one selling to service
providers and the other focusing on the enterprise.
MetaSwitch, a company focusing on the service
provider market, has done a good job promoting their recent customer win
announcements and other positive news. They successfully leverage a unique
identity while simultaneously promoting the fact that they are part of Data
Connection, a company founded in 1981 employing over 275 people. They are
especially proud of the fact that they have continued to hit their financial
targets, recording profits in 2002, and are reportedly on track for more of
the same this year. The company also maintains a commitment to ongoing
investment in new and better technology: Fully 70 percent of the companyï¿½s
engineering resources are at work on new products. Data Connection maintains
a customer list consisting of companies like Cisco, Lucent, Nortel, IBM,
Sun, Verizon and other blue-chip names and is privately owned by an employee
benefit trust, which is -- in theory at least -- a more advantageous way to
structure your company in these times.
MetaSwitch has been making a splash with their VP3500 Next-Generation
Class 5 switch, as it is able to support POTS, IP telephony, and voice over
ATM with further support for a distributed softswitch and IP Centrex. There
is ample support for new services such as unified messaging, conferencing,
and call waiting, and a Web interface for subscribers, allowing them to
order these and other services.
One customer, Yukon Telephone, is using a VP3500 to provide IP telephony
service over satellite, which will result in significant savings for them.
Yukon Telephone, the incumbent provider for the rural Alaskan communities of
Whittier, Tanana, and Ruby, selected the VP3500 to replace its existing TDM
Class 5 Switches following a side-by-side evaluation, conducted by Reeve
Engineers in Anchorage, of the VP3500 and switches from several other
On To The Enterprise
I recently came across a company that caters to the enterprise space and
has found its niche in infrastructure management.
NetSolve provides IT
management solutions offering businesses an alternative to internally
managing their infrastructure by enabling businesses to selectively
outsource day-to-day infrastructure management, and transition to new
technologies and applications. Essentially, as corporate networks get more
complex, NetSolve manages your network remotely using proprietary monitoring
and management tools.
Conforming to rule #1, the company was founded 14 years ago as a reseller
of private line services. Just under 10 years ago, they shifted their focus
to managing frame relay connections. AT&T eventually resold the NetSolve
service allowing companies to manage their frame relay service. From their
network operations center in Texas, they manage 50,000 devices connected to
over 1,000 networks for 1,200 customers and do this on a 24x365 basis.
They have recently decided to focus on managing IP telephony networks.
They are currently managing 250 Cisco Call managers at 150 sites looking for
dropped packets and/or QoS issues. They can aid a company that needs help
managing its network and can provide co-managed services as well. NetSolve
takes ownership of problems with equipment and can even upgrade software as
needed. A Web portal is provided allowing customers to see what is happening
Currently the company has decided to focus on Cisco IP telephony
solutions and will soon tackle others, including Avaya. Many people perceive
NetSolve as a threat to their job security but the reality according to the
company is that they give you more control over your network, giving you a
window into your network that is virtually impossible to duplicate.
The IP telephony market is full of companies that are poised to do well
in the near term as well as over a longer period of time. By keeping tabs on
a company's fundamentals, including their cash flow and (paying) customer
base, you can see a clearer picture develop when it comes to deciding which
companies are solid prospects to buy products from.
To The July 2003 Table Of Contents ]