& cplSiteName &

Genband Scores NextPoint

Phil Harvey
9/16/2008
50%
50%

Genband Inc. announced Tuesday that it's acquiring NextPoint Networks Inc. for an undisclosed sum of cash and stock, with the intent of integrating that company's session border controller and security gateway functions into its media and convergence gateway products.

Genband's main product line, the G9 media gateway, acts as an intermediary between circuit-switched telephone and IP-based packet networks, translating signaling and other protocols between the two, while allowing carriers to offer new IP services without having to completely discard the billions invested in legacy networks. (See The Emergence of the Session Border Media Gateway.)

Over the years, Genband has tackled the same basic need in the fixed telco, wireless, and cable network sectors, buying and building itself a portfolio of products that service providers use to connect, secure, and route multimedia traffic among disparate networks.

With the acquisition of NextPoint, Genband will enable carriers to consolidate the edges of their networks and deploy a single element to provide complete session management for multiple types of access technologies. "The industry sees the need for all of these capabilities to converge into a single platform," says Charlie Vogt, Genband's CEO.

Genband has had its eye on doing this by itself, as we noted back in April. (See Genband Fun Facts.)

But Vogt says it "really struggled" to build everything from scratch. He says: "When you look at the comprehensive feature set and all the interoperability required, it's a tough hill to climb."

Speaking of tough climbs, when last covered by Light Reading, NextPoint Networks had fallen off a cliff. It was cutting staff, watching its CTO walk, and generally getting weird (once it made a reference to outsourcing its limbs in lieu of its brains). (See What's NextPoint's NextMove?)

Vogt said the acquisition was "the toughest transaction we've ever done... They're very proud of their technology and their company… What made it tough was getting to a valuation that everyone around the table could get excited about."

Always good for a laugh, NextPoint was itself a merger of two startups -- NexTone Communications and Reef Point Systems -- which combined in January. Before it became part of NextPoint, Reef Point Systems was known as Quarry Technologies, a maker of IP service switches that was backed by Corvis Corp. and others. (See Quarry Snares $38 Million and Reef Point: You Were the Quarry.)

Dig through Light Reading's archives and you'll even see one instance where NexTone and Reef Point, before pairing up, took shots at one another over which platform had the best security features. (See Reef Point Lands $21M, Gets Woody.)

So now all the fun and games has landed on Genband's doorstep. The obvious analysis is that, while a more converged media gateway with more functions sounds great on paper, there's just no telling if it will actually work. To that end, Genband hasn't said how long it will take before it is able to integrate NextPoint's technology into its products.

While Genband is widening its addressable market with the deal, it is getting in the face of a couple of new competitors as well. With Alcatel-Lucent (NYSE: ALU), NEC Corp. (Tokyo: 6701), Nortel Networks Ltd. , Nokia Networks , and other large systems vendors as resellers and partners, Genband's main rival of late has been Huawei Technologies Co. Ltd. , with some smaller gateway competition from AudioCodes Ltd. (Nasdaq: AUDC), the Israeli vendor whose stock has fallen 47 percent so far this year, and which recently cut back its own session border controller resources. (See AudioCodes Rakes Netrake.)

With the acquisition of NextPoint, that competitive set now includes Acme Packet Inc. (Nasdaq: APKT) and Starent Networks Corp. (Nasdaq: STAR) "You can bet we're going to get right after Acme," says Vogt, as if that company needed any bulletin board material.

Vogt says Genband, which took in $94 million in revenues during 2007, has already realized $72 million in revenues thus far this year, with $15 million coming from wireless gateway sales in India alone. He says next year as much as half the company's revenues could come from outside the U.S.

— Phil Harvey, Editor, Light Reading

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
acme911
50%
50%
acme911,
User Rank: Light Beer
12/5/2012 | 4:15:06 PM
re: Genband Scores NextPoint
Indeed 100 days after the merge everyone can now understand the real benefits of this "strategic" move. Q4 results are going to be half of the average previous quarter. Future looks even worse and again Reefpoint individuals have managed to kill internally a company like they did with Nextone.

Very good shot Charlie, indeed!!
optodoofus
50%
50%
optodoofus,
User Rank: Light Beer
12/5/2012 | 3:32:12 PM
re: Genband Scores NextPoint
Morey, er, Charlie, is gathering up quite a collection of companies there. I am quite doubtful that they will be successful porting the features of three hardware platforms into one. How much progress did NextPoint make merging the SBC and security gateway over the past 1.5 years? Not throw a MGW into the mix.

They should rename this company Quagmire.

optodoofus
ed_eds
50%
50%
ed_eds,
User Rank: Light Beer
12/5/2012 | 3:32:11 PM
re: Genband Scores NextPoint
Nextone and reefpoint merged only 8 months ago according to Lightreading story. Also they have been shipping their ATCA platform with an SBC blade already. We got a demo at NXTComm in Las Vegas and they had references from big carriers. I think GenBand did well here. Media Gateways need this type of functionality to offer more connection types between networks. Not to mention the Femto angle here. ED
optodoofus
50%
50%
optodoofus,
User Rank: Light Beer
12/5/2012 | 3:32:10 PM
re: Genband Scores NextPoint
OK, 17 months is wrong. (I winged it and never looked it up). It's really more like 10 months according to this:

http://www.lightreading.com/do...

However, I stand by my statement about their integration. A separate SBC ATCA blade is not integration. And even if they do manage full SBC/security gateway/media gateway integration in a short period of time (by some magic), is that a recipe for success? Ask the people at Sonus how much headway they are making with their integrated SBC/media gateway? Their SBC market share is tiny - even two years later.

Sorry, I don't see this as a good idea. Of course, everyone is entitled to their own opinion. Let's check back in a year and see how it works out.

optodoofus
DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 3:32:08 PM
re: Genband Scores NextPoint
Certainly, flawless execution will be required by Genband to avoid the perception that media gateway vendors cannot integrate SBC technology....

http://www.lightreading.com/do...
voicethoughts
50%
50%
voicethoughts,
User Rank: Light Beer
12/5/2012 | 3:32:06 PM
re: Genband Scores NextPoint
I see that Jim Hodges is leading a study on the integrated "Session Border Media Gateway". The question of Integrated (into a router/gateway) or unipurpose appliance SBCs has been posed since 2004.

Observing the last few years of the SBC, it seems that the SBC market took a lot of evangelizing and focus -- clearly evidenced by market penetration of Acme and NexTone, who built appliance SBC. If focus is key, can vendors whose main line of business is TDM-IP Gateways be successful providing an appliance solution -- probably not. They are forced to spend resources to integrate the functionality, and face time-to-market constraints - meanwhile, appliance SBC vendor Acme maintains lead. I guess the question really is if the Integrated Gateway-SBC is disruptive enough that it'll gain significant traction in the market?

Interesting to note that Acme did over $100M in revenue in 2007 - larger than Genband did that year.
ThurstonHowell3rd
50%
50%
ThurstonHowell3rd,
User Rank: Light Beer
12/5/2012 | 3:31:50 PM
re: Genband Scores NextPoint
Morey... Charlie... I can see how that might be confusing... I think Morey was taller...

As for integration I think they got as far as nailing the two together with a couple of penny nails and an air hammer...

Now Gilligan... fetch me another drink and don't forget the umbrella!!
Featured Video
From The Founder
Light Reading founder Steve Saunders talks with VMware's Shekar Ayyar, who explains why cloud architectures are becoming more distributed, what that means for workloads, and why telcos can still be significant cloud services players.
Flash Poll
Upcoming Live Events
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
I'm Back for the Future of Communications
Phil Harvey, US News Editor, 4/20/2018
BDAC Blowback – Ex-Chair Arrested
Mari Silbey, Senior Editor, Cable/Video, 4/17/2018
Verizon: Lack of Interoperability, Consistency Slows Automation
Carol Wilson, Editor-at-large, 4/18/2018
AT&T Exec Dishes That He's Not So Hot on Rival-Partner Comcast
Mari Silbey, Senior Editor, Cable/Video, 4/19/2018
Facebook Hearings Were the TIP of the Data Iceberg
Dan Jones, Mobile Editor, 4/20/2018
Animals with Phones
I Heard There Was a Dresscode... Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed