Acme Packet Buries Decomposed SBC

Metaswitch Networks is making a big deal of introducing its own session border controller (SBC) product after years of reselling the products of market leader Acme Packet Inc. (Nasdaq: APKT). (See Metaswitch Picks a Fight With Acme Packet.)

And Metaswitch believes the market is about to open up for a decomposed SBC model, whereby the signaling and media capabilities of the SBC are scaled, and even housed, separately -- an approach that has been offered by multiple vendors but so far gained no traction.

But for the team at Acme Packet, the latest assault by a current channel partner is nothing new.

"We've seen this movie before," points out Seamus Hourihan, a longtime Acme executive who was recently appointed as senior VP of corporate strategy. (See Acme Packet Promotes Hourihan.)

He notes that other manufacturers that resell Acme Packet's SBCs have built and launched their own products, including Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Sonus Networks Inc. (Nasdaq: SONS) and Nokia Networks , yet Acme Packet's position as SBC market leader hasn't been troubled.

Raised eyebrows
The only thing that raised Hourihan's eyebrows is that Metaswitch expects to be No. 2 in the SBC market by 2013.

"That surprised me," he says, having provided the expected praise of Metaswitch as a "valued partner" of long standing. "That's a very lofty goal."

Metaswitch has resold Acme Packet's SBCs primarily to its smaller rural telco base in the U.S., Hourihan says, and that market is largely saturated. He believes Metaswitch will find the mobile market for SBCs a difficult one to conquer.

"There will be a high hurdle for them to get in that area," he says, citing Infonetics Research Inc. SBC market data that lists Acme Packet as the market share leader and second in brand awareness, with seven other companies listed. "We have major LTE wins that we haven't even talked about yet."

Chad Hart, Acme Packet's manager of competitive and market analysis, adds that the company today is "engaged" with a number of mobile operators that are looking at how their networks will transition to VoIP and cope with greater volumes of signaling traffic.

"It's not an instant transition. many mobile operators have trial networks and we are working with them on that. VoLTE [voice over LTE] architectures are being designed and trialled. ... The major carriers take years for their evaluations," states Hart.

Nothing new in decomposed model
The idea of a decomposed SBC, which Metaswitch is touting, is also hardly a new concept, Hourihan adds.

"Alcatel-Lucent started with a decomposed [SBC], but the product it has now is integrated -- the same is true for Ericsson," he says.

While decomposed SBCs add flexibility by separating the signaling and media flows and allowing each to scale as necessary, they also add cost, both in capex and particularly in opex, Hourihan says. The geographic separation of the signaling and media makes it harder to troubleshoot problems, because the correlation between the two can be lost.

"We have that [decomposed] solution -- we've had it for a while," Hourihan says. "We have a couple of customers that are using that model, but it's not widely embraced." (See Acme Packet Decomposes.)

He adds that "the architecture that's needed is what we have today. We haven't seen any significant change in architectural requirements regarding decomposed SBCs. We have held discussions with the large operators and they've come back to the current, integrated model."

Hourihan also dismisses Metaswitch's claims about the advantages of an ATCA hardware platform. "We have an ATCA option as well and some mobile operators have certain ATCA preferences and we're working with them on that. ... But an ATCA deployment is much more expensive than our proprietary hardware [option]," with additional costs running to $100,000 or more in deployments where SBCs are stacked together and deployed with a load balancer.

In essence, Hourihan believes there's no validity in Metaswitch's claims about how market demands will change. "We have the market covered," says the man formerly known as Jim. (See VON Bites: Purple Prose.)

SBC trends -- the Acme view
Hourihan is confident that Acme Packet's dominant position in the SBC space -- it claims to serve 90 of the top 100 service providers -- puts it in the best position to know what operators need or are seeking.

And a decomposed SBC is not, he believes, on operators' wish lists.

Here, though, are the SBC trends and drivers Hourihan is seeing:

— Carol Wilson, Chief Editor, Events, Light Reading