New Applications Give VoIP Vendors Competitive Edge

The acquisitions of software companies by VoIP hardware vendors, such as the CopperCom Inc. addition of Switchmaxx about a week ago, illustrate how important having a broad range of application software, beyond phone features, is becoming for these hardware companies and their service provider customers as well.

Other acquisitions that illustrate this trend are Genband’s buy of Syndeo, a developer of softswitch technology, about the same time it changed its name from General Bandwidth to Genband.

Even a leading software provider, BroadSoft Inc., has augmented its offering with the acquisition late in 2005 of Carbon Twelve, a software and multimedia applications developer based in Sydney, Australia.

CopperCom bought Switchmaxx for its capabilities in customer portals, which is viewed as a competitive advantage at a time when IOCs are starting to get competition from both the broadband voice providers and cable companies. “Independents are starting to realize, as they put together bundled services, that they need to create a distinct brand and drive people to their services rather than a cable company or Vonage (Holdings Inc.),” says Chuck Harris, vice president of marketing at CopperCom.

While the addition of Switchmaxx will not greatly expand CopperCom’s addressable market the way its host-remote capabilities did, says Joe McGarvey, principal analyst of carrier IP telephony at Current Analysis Inc., it may well tip the scales in a sale. “Service providers might be swayed by things like the self-care and Web portal capabilities, so there might be differences in selling one piece of hardware over another,” McGarvey says.

Also, CopperCom customers might not be offering broadband telephony to all customers, but with the addition of the CopperCom switch with Switchmaxx software next to a legacy TDM system, all customers can use a Web portal to manage their services and the portal will not change if they are migrated to VoIP. “That was one of the selling points, the fact that it was also compatible with (Nortel Networks Inc.) DMS 10s and other legacy equipment,” says McGarvey.

Competitors in the same space as CopperCom, such as Tekelec and MetaSwitch, also have worked to maximize the application capabilities of their hardware offerings. MetaSwitch has taken advantage of its parent firm, Data Connection Ltd., while Tekelec acquired hosted PBX software company VocalData. Although there are distinct differences in the hardware offerings of all three companies, they all target similar markets, namely IOCs, CLECs, ISPs and cable companies adding voice.

“If you look at what MetaSwitch,Tekelec and CopperCom are doing, they are obviously getting feedback from customers that they don’t want just what they had before. They want all the bells and whistles that VoIP has and self care,” says McGarvey.

When Tekelec acquired Taqua a couple of years ago it got a customer Web interface that was functional but “clunky,” McGarvey says, in keeping with its roots as a small-footprint TDM switch. However, now most of those products are being sold in conjunction with the Tekelec T6000, the software it acquired as VocalData, and its more sophisticated Web portal. “That is what they are using for a Web portal now,” McGarvey says.

With recent management changes, Genband has been trying to re-energize itself, and the acquisition of Syndeo appears to be an important step in that process. The company essentially offered a smart media gateway with call-control features but without the full functionality of a dedicated softswitch that Syndeo brings.

Syndeo had been marketing its software to cable companies, with limited success, but the combination of the Syndeo software with the Genband gateway may provide products with more appeal in that market, as well as with independent telcos and CLECs.

Genband already picked up an important customer win with Deltacom Inc., formerly ITC^Deltacom, a CLEC serving a wide area of the southeastern U.S. ITC^Deltacom chose the Genband G6 Universal Media Gateway for its packet telephony service offering. The G6 also is a product that can span both packet and circuit-switched networks.

The Carbon 12 software acquired by BroadSoft includes a toolbar that enables users to make and accept telephone calls, and manage settings and preferences within Microsoft Outlook and Internet Explorer. It also includes a VoIP attendant console for receptionists to manage calls. The Outlook integration adds capabilities that are unique to VoIP: the ability to integrate with desktop applications, adding voice to their features. The second expands the BroadSoft software to duplicate familiar functions of PBXs, an important addition as VoIP software seeks to replace dedicated hardware.

BroadSoft Inc. www.broadsoft.com
CopperCom Inc. www.coppercom.com
Current Analysis Inc. www.currentanalysis.com
Data Connection Ltd. www.dataconnection.com
Deltacom Inc. www.deltacom.com
Genband www.genband.com
MetaSwitch www.metaswitch.com
Nortel Networks Inc. www.nortel.com
Tekelec Inc. www.tekelec.com

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