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December 19, 2008

Exiting 2008 on a High Note, MetaSwitch CEO Looks Ahead to 2009

By Greg Galitzine, Group Editorial Director

MetaSwitch, a division of Data Connection, designs and distributes switching and applications solutions for both packet and circuit-switched networks, and serves over 400 service provider customers. During the last quarter, the company shipped capacity for more than two million subscribers worldwide.
Most recently, MetaSwitch (News - Alert) was named the number one provider of VoIP call control solutions in North America, according to an Infonetics Research report, Service Provider VoIP and IMS Equipment and Subscribers. The report recognizes MetaSwitch's market leadership with 44% of total subscriber licenses shipped in the North American Class 5 softswitch category, as well as a leading share of the overall North American softswitch market with a 33% share of licenses shipped.
Graeme MacArthur is CEO of MetaSwitch.  MacArthur was kind enough to provide responses to a series of questions regarding the state of the market, the future of IP communications, and what an Obama administration might mean for the telecommunications space.
GG: When you look back on 2008, was it a good year for your company?
GM: 2008 was the best year yet in MetaSwitch history. We had record revenues, our customer base grew to more than 400 network operators, we had record attendance at the MetaSwitch Forum, our annual customer event, and we continued to earn high ratings for quality service support.
Among our accomplishments, MetaSwitch solutions were selected to power Embarq’s (News - Alert) new Smart IP Enterprise solution, Frontier’s new messaging solution and Satel’s new telephony services in the Dominican Republic. Many carriers also deployed the MetaSphere Application Suite to revitalize their TDM networks.
We also introduced innovative new products to streamline network management for network operators — Voice Quality Monitoring for industry-first network diagnostic capabilities and SIP Provisioning to streamline the deployment and management of SIP phones.
GG: What was your firm’s biggest achievement last year?
GM: Data Connection announced record revenues of $118.1 million for Fiscal Year 2008, making the company profitable for the 27th consecutive year. MetaSwitch, the largest division, grew revenues 22% from the previous year, and accounted for 78% of the total revenue. This achievement was particularly significant considering the current economic situation. In addition, Data Connection took in its first round of external funding with a significant investment by Francisco Partners and Sequoia Capital (News - Alert), helping to continue our ongoing investment in research and development, as well as expansion into new geographies. This was the first external funding since Data Connection was founded in 1981.
GG: What can we expect to see from your company for the next 12 months?
GM: MetaSwitch will continue to invest heavily in product and application development, especially in the areas of Web-based services and advanced network management tools. We will continue to support and grow our customer base in North America, the Caribbean and Latin America as well as investigating opportunities in new and emerging markets. Finally, as our employees continue to be our greatest resource, we will sensibly grow our team to support our ever-expanding technology portfolio and to maintain the quality and responsiveness our customers have come to expect from MetaSwitch.
GG: Do you think a new administration in Washington, D.C. will be good for the communications industry? If so, how? If not, why not?
GM: Based on what we hear so far, we are optimistic that the new administration will be good for the communications industry. Support for broadband deployment, in particular, will help both the industry and the community. In addition, with Carol Browner’s appointment as the White House coordinator of energy and climate policy, the communications industry will pay closer attention to reducing carbon emissions. We agree that this issue is very important and our solutions already enable massive power and space savings, as noted in our recent white paper, “The Environmental Benefits of Deploying MetaSwitch Class 4/5 Softswitches.”
GG: In your view, please describe the future of the IP Communications industry?
GM: Despite the current economic turmoil, we have a very positive view of the future of the IP Communications industry. Applications are becoming increasingly user friendly and providing true value to end users, boosting demand. At the same time, networks are more reliable, faster, more ubiquitous and indispensible to consumers and businesses as they reach for content and broaden spheres of communication.
GG: How do the current market conditions affect your potential customers? Do you think they will hold off on purchasing new solutions or do you think the economic conditions will spur them to make purchases that will allow them to be more competitive?
GM: Our potential customers are affected by current market conditions to varying degrees. We find that as carriers closely examine their expenditures, they are questioning the value they receive from traditional legacy suppliers, as well as their future viability.
Carriers are therefore aggressively seeking out partners that are stable, profitable and able to deliver a clear and immediate positive impact on their bottom line, either with quick-to-revenue services or clear savings in the cost and maintenance of their infrastructure. MetaSwitch is uniquely positioned to continue to be a trusted, integral partner to our diverse and growing customer base of CLECs, ILECs, IOCs and MSOs.
GG: What sets your company’s solutions apart from the competition?
GM: MetaSwitch is a trusted technology partner that our customers rely on to deliver flexible voice solutions that just work. Our long-standing success is based on reliability, exceptional service, quality engineering and innovation – all values that we share with our customers.
Furthermore, MetaSwitch is in a unique position to both satisfy core switching requirements, including next-gen network evolutions, as well as provide customers with a broad range of revenue generating applications. With the current business climate characterized by rapid change and disruption in both the technology and fundamental structure of the telecoms industry, MetaSwitch stands apart because of our ability to apply these timeless values to solve the complex, difficult issues our customers face today.
GG: If you had to make one bold prediction for 2009, what would it be?
GM: Sergio Garcia will win the Masters by one stroke, with a birdie-birdie-par finish on the final day.

Greg Galitzine is editorial director for TMC’s (News - Alert) IP Communications suite of products, including To read more of Greg’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Greg Galitzine

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