Excel Switching Corp. today introduces a new product line and strategy aimed at further propelling the company beyond its flagship programmable switching business and into the market for gear that bridges legacy and IP networks. The product launch is Excel’s first since the company was spun out of Lucent Technologies Inc. (NYSE: LU) a year ago (see Lucent Sells Excel Switching Group).

The foundation of the new product line is Excel’s 1010, a one-rack-unit box that functions as a signaling server and, with additional software, adds voice functions. The first version of the box, the MSP 1010, will ship in August and will transport Signaling System No. 7 (SS7) information. A second iteration, the CSP 1010, will debut in the fourth quarter with support for voice over time-division multiplexing (TDM) links. Finally, the IMG 1010 will appear in the first quarter of 2005 and add voice-over-IP (VOIP) codecs and support for session initiation protocol (SIP).

The 1010 is partly a stripped-down version of Excel’s IMG 2090, a nine-rack-unit integrated media gateway that transports signaling and voice traffic. The 1010 squeezes some of the 2090’s internal electronics onto one board for high density at a low price. But unlike the 2090, the 1010 does not come with built-in voice functionality.

“People today use the 2090 platform for a combination of voice and signaling,” says Mike Twomey, VP of marketing at Excel. “What our customers have come to us and said is, ‘For certain services, there’s no need for voice. With an all-SS7-based service control point or a short messaging service (SMS) product, there’s no voice associated with it. I can really use something fundamentally designed just to handle signaling.’ That’s where we’ve gone with the 1010 platform.”

Nathan Franzmeier, president of Emergent Network Solutions Inc., which develops applications that run on Excel’s boxes, says the 1010 will fill a gap in the middle of the signaling gateway market. “At the low end, you can buy an SS7 card for $1,000 and add your own software, and then you’ve got the high end with, say, Tekelec,” Franzmeier says. “Then you’ve got Excel playing the middle and being versatile in terms of having more capabilities to be customized.”

Customization of the 1010 comes from adding software from Excel and its application-development partners. The box enables such applications as tele-voting (think, if you must, American Idol), SMS messaging, audio conferencing, and, with the addition of VOIP codecs, IP Centrex and IP-PBX.

The latter application could allow Excel to sell products to enterprise customers for the first time in its 15-year history. Previously, the company has sold only to service providers. Its new strategy calls for it to rely heavily on channel partners -- particularly original equipment manufacturers (OEMs) and application developers -- to sell its products around the world (see Excel Signs Global Partners).

Excel was spun out of Lucent last year through a buyout led by Soros Private Equity Investors LP and Oak Investment Partners. Terms of the deal were not disclosed. Lucent had acquired Excel in 1999 in a $1.7 billion stock swap, after which Excel suffered through Lucent’s earnings shortfalls and accounting scandals (see Lucent Shares Hammered by $125M Goof).

“Some of our customers, frankly, lost track of us when we were inside of Lucent,” Twomey says. “They didn’t know how to get in touch with us, and Lucent’s people didn’t necessarily know where we were inside their shop. Since we’ve come out, a lot of the older customers who either couldn’t find us or always thought Lucent was going to kill us came back and said, ‘I’m glad you guys are back.’ ”

Excel says it has booked sequential growth in revenues and profits every quarter since the buyout, though the privately held company won’t disclose financial specifics. In the past year, the company’s number of application-developer partners has grown 20 percent, and its number of channel partners has grown 300 percent.

IP-enabled products make up half of Excel’s current shipments, showing how far the company has evolved from its original switching business. As part of Lucent, Excel invested over $100 million worth of research and development in its IP products. Now, as an independent company, it is set to reap the rewards.

— Justin Hibbard, Senior Editor, Light Reading