Shabtai Adlersberg on AudioCodes, VoIP and the New Mediant 1000 MSBG

By: Rich Tehrani (News - Alert)

AudioCodes Ltd. (www.audiocodes.com) first caught our attention in the 1990s with their superlative, high density packetization boards. Today, much of the world’s Next-Gen network infrastructure benefits from AudioCodes’ (News - Alert) innovative, reliable and cost-effective Voice-over-Packet technology and Voice Network products used by OEMs, Network Equipment Providers (NEPs) and system integrators.

The AudioCodes portfolio of products is so extraordinary that it would take several pages to simply list them, let alone describe them. In one area, it ranges over enabling technology products such as Voice-over-Packet chip processors, VoIP PCI and cPCI communication boards and VoIP media gateway modules (PMC form factor) and media gateways. It offers voice network products such as media gateway and media server platforms for packet-based applications in the wireline, wireless, broadband access and enhanced voice services markets. It also offers analog and digital VoIP media gateways for enterprise, contact centers, IP Centrex and broadband access applications. Its range of Core Network Gateways spans low, midsize and high density applications, and its CPE (Customer Premise Equipment) and Access Gateways (such as the Mediant™ 2000 digital gateway and the MediaPack™ Series analog gateways) include sophisticated interfaces and signaling. And, for enhanced security, AudioCodes offers Security Gateways and SBCs (Session Border Controllers) for secure VoIP traversal of firewall and Network Address Translation systems, as well as, DoS (Denial-of-Service) attack prevention via deep packet inspection at both SIP/H.232 signaling and VoIP media layers.

Upon hearing that AudioCodes was about to launch a new product, our own Rich Tehrani recently sat down and talked with the company’s Chairman, President and Chief Executive Officer, Shabtai Adlersberg (News - Alert).

RT: What is the strategic importance of the Mediant™ 1000 MSBG launch for AudioCodes?

SA: The significance of this launch is in introducing for the first time a truly converged voice and data multi-service CPE device with extended VoIP and SBC capabilities. The Mediant™ 1000 MSBG will enable AudioCodes to strengthen and further establish our competitive position in the CPE marketplace. In fact, we are capitalizing on our leadership in the VoIP space and plan to expand our Pure VoIP media gateway play into a multi-service play which combines enhanced VoIP capabilities Data services. In essence we are opening up a new market segment which will allow us to offer growth, expansion of our customer base and market share within the next few years. According to a market study by In-stat, the multi-service media gateway market is currently estimated at $600-$700 million a year and is set to increase to $2 billion in the next 4 to 5 years. AudioCodes’ entry into this market with unique strategic advantages will allow us to become a leading player and ranked among the top players.

RT: AudioCodes has always been a voice-focused company. Does this mean that you are moving to a converged voice-data model?

SA: Yes, this announcement marks a new strategy for the company by expanding from the pure packet voice focused approach to a more comprehensive converged play which combines voice services with data services. On the voice services side, we are combining for the first time a PSTN-IP gateway with an IP-IP gateway and Session Border Controller (SBC) capabilities. On the data services side the product offers features and functionalities associated with data services such as, switching, routing, security features, Wide Area Network connectivity and more.

RT: How will customers benefit from the Mediant 1000 MSBG?

SA: Customers will benefit by being able to have an all-in-one integrated cost-effective product which will provide them with many functionalities and features which are implemented these days in several boxes today in the SME market. Features include firewall, handling security features and voice connections to the PSTN, and adding a Session Border Controller to support IP-to-IP connections. Additionally, the Mediant 1000 MSBG provides the creation of a single demarcation point for all the enterprise communications in various service provider networks.

RT: What kind of applications do you see for this product?

SA: As mentioned above, key applications include extended high quality voice and multimedia sessions over broadband access networks, support for common enterprise data applications and for mobile devices, wideband telephony terminals and communications and more.

RT: Do you think VoIP will evolve further or are we looking at a commodity market at this point?

SA: The world of VoIP communications continues to evolve at this stage and is far from becoming a commodity. With new mobility, broadband access and wireless network applications, growing services in the areas of WiFi, Femtocell (News - Alert) and Wi-Max, and the emergence of Wideband Telephony to offer substantially better voice quality and a much richer user experience, VoIP networks will continue to develop and evolve for many years. Additionally, with the need to interconnect VoIP sessions across different service provider IP networks and a diverse set of multimedia applications, we believe that the future for VoIP technology and applications is bright.

RT: You recently announced a profitable Q1, the fourth quarter in a row. Has AudioCodes turned the corner? What are the key factors for the company over the next 12-18 months?

SA: In terms of our financial performance, AudioCodes has made a nice recovery in recent quarters with steady progress in growing our quarterly revenues and profits. While we keep growing our global sales coverage and market share, and continue to expand leadership in the market, we are able to focus resources and improve our operational efficiency. We are now on track to continue our healthy growth rate with the introduction of this new product line and new technology offerings.

RT: AudioCodes is now celebrating its 15th anniversary. Where do you see the company going in the next 15 years?

SA: The company is now evolving to become a major CPE player in the enterprise and service provider telephony space. With global networks transforming into application networks, we envisage ourselves as natural partners to companies who provide application and call server software — and as such we believe that AudioCodes will become a leader in intelligent embedded software and hardware in CPE products, which will match the capabilities required by applications to run on top of broadband and IP networks.

RT: How does the Mediant 1000 MSBG differ from the existing Mediant 1000 Media Gateway (News - Alert)?

SA: The Mediant 1000 MSBG is an evolution of the existing Mediant 1000 Media Gateway. It utilizes a new stronger CPU module, but still uses the same media and services modules of the Mediant 1000, including the FXS/FXO/BRI/E1/T1/J1 voice trunks, an improved OSN Module, and a new enhanced media server module.

RT: What significance does the Netrake acquisition have for the Mediant 1000 MSBG?

SA: Several of the Session Border Controller capabilities which have been added are based on technology acquired from our Netrake acquisition which brought in-house a vast amount of technology and experience.

RT: AudioCodes had a number of acquisitions over the past few years. Are you planning any future M&As?

SA: In 2008 we selected to focus on completing the integration of the technology and companies acquired in 2006, and the embedding of newly attained capabilities to provide integrated products. Similarly, we continue to identify new emerging applications and needs in the market, and when appropriate, may engage again in M&A to bring these capabilities to the company.

RT: AudioCodes is gaining market share — where are you taking this market share from? Is it from the small players or NEPs?

SA: The VoIP market has been on a consolidation path for quite a few years. With AudioCodes position getting stronger, we are able to capture market share from both ends of the market. Building a successful global operation with strong financial backing and the ability to continuously evolve products and offer cost reductions, while adding features, we continue to outperform smaller players. We also enjoy success in capturing market share from some of the large NEPs as a number of them have recently lost interest and the incentive to continue to invest in this market segment which is relatively too small for them.

RT: Can you give an idea of a timeline when you expect to have new product launches?

SA: The first fully featured MSBG product release is due for beta testing this coming fall. Another product in this series is due early next year.

RT: Describe your view of the future of the VoIP industry?

SA: As mentioned previously, VoIP will continue to evolve through the emergence of a variety of broadband and wireless communication applications and will become increasingly a more essential ingredient of the Next-Gen network. IT

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