I was recently made privy to a comprehensive new report on
the softswitch technology marketplace, researched and
written by Herb Tinger, someone I consider to be one of the
best and most knowledgeable communications technology
analysts around today. Herb currently serves as lead analyst
of the Communications Infrastructure practice at Advest, an
investment research and services firm based in Hartford, CT.
The study, Softswitch Technology: Communications
Infrastructure for the Next 100 Years, takes an in-depth
look at the emerging opportunities for softswitch technology
in today's communications networks, and provides a
wonderfully lucid background of the technology leading up to
the development of these "legacy circuit-switch killers."
The report also provides numbers for the projected size of
and growth opportunities for the market, and offers concise
profiles of 48 softswitch vendors.
Salient highlights from Herb's softswitch research neatly
sum up the opportunities facing vendors in this space:
- Ever since the invention of the phone in 1875, the
PSTN has evolved into the most reliable network in the
world, designed to have 99.999 percent availability, or
just 5.25 minutes of downtime per year. However, the
rapid rise in data communications and Internet usage has
taxed the limits of the circuit switched infrastructure,
and new, packet-based switching solutions are poised to
take center stage as the next generation network
- At the heart of this evolution are softswitches, which
allow service providers to separate the proprietary
functionality of legacy circuit switches into three
distinct layers: Transport, call control, and
applications and services. This new, open
standards-based architecture offers both efficiency and
cost savings for service providers, enables new revenue
sources, and ultimately increases customer loyalty.
- The softswitch solution, which is made up of four
separate components including the media gateway
controller, media gateway, SS7 signaling gateway, and
the applications server, is still in the early stages of
development. The softswitch seeks to surpass the
functionality and performance of legacy circuit switches
by providing drastically lower cost, higher scalability,
easier management and deployment, and solid reliability
- Softswitches only have a limited track record to date,
they have not yet been able to equal Class 5 switch
functionality, and they face several significant
obstacles to deployment including unproven technology,
scalability, and perceived reliability. Despite all
this, technology and solution performance is doubling
every 18 months, and the latest softswitch iteration
reached the market earlier this year. It's a good bet
that Class 5 capabilities are likely to be available by
the end of the year.
- The softswitch potential market is quite large, and
worldwide revenues are expected to expand from
approximately $700 million in 2001 to $7 billion in
2004, according to most market research estimates.
Recognizing this opportunity, nearly 60 vendors supply
some type of softswitch solution, and industry
consolidation and segmentation is already occurring on a
fairly regular basis.
- The switch replacement opportunity for softswitch
solutions is very meaningful, as Advest's research
estimates that a total of 25,512 Class 5 switches and
1,428 Class 4 switches will be installed by 2003. The
combined switch replacement opportunity does not take
into account international markets, or the number of
softswitch deployments that have and will occur without
actually replacing a legacy switch, which would push the
revenue potential even higher.
Softswitch technology is a major catalyst for the
transformation of the PSTN network to a next-generation
environment. Once the hanging technical issues are resolved,
and full Class 5 functionality is achieved, softswitches
promise to impact the communications industry in a number of
For one, the technology promises to ultimately collapse
the existing circuit switched and packet-switched networks
into a single, highly efficient network. It also can enable
new enhanced services creation and use by taking advantage
of both packet switching and VoIP technology, and perhaps
most important of all, leverage a new, modular network
architecture (which includes open, standards-based hardware
and software) to simplify and expand upon the current
capabilities of packet switching solutions.
To contact Herb Tinger and get more information about
his research, call 518-226-7324, or e-mail email@example.com.
Marc Robins is vice president of publications at TMC and
associate group publisher for INTERNET TELEPHONY magazine.
Marc has been covering the communications industry since
1980, and his column takes a look at some of the more
interesting trends vying for attention in our industry.
Please contact Marc with comments at firstname.lastname@example.org.
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