The Future of Metaswitch
6:00 AM -- ORLANDO, Fla. -- Metaswitch Forum 2012 -- John Lazar has taken the stage and is, once again, ready for his close-up.
Not that John Lazar, the other one.
Lazar, named Metaswitch's CEO in June, has been out of the driver's seat for two years as the company was being run by Kevin DeNuccio, the former Redback Networks Inc. chief who had caviar wishes and IPO dreams. (See DeNuccio Replaced as Metaswitch CEO.)
DeNuccio is still on Metaswitch's board, and Lazar says he consults with DeNuccio regularly.
But Lazar isn't here talking growth, necessarily. He's using the word transformation an awful lot. The time away from the CEO chair allowed him to look at the company he's worked for since 1987 more objectively.
Now that he's back, the former software engineer is describing Metaswitch as a "software company." He's not just trying to sound hip. His four-part strategy provides a glimpse into a company that is helping its customers modernize their networks, while giving them a reasonable path to provide revenue-generating services that businesses and consumers want, over IP networks.
The challenge facing Lazar is interesting. Metaswitch had revenues last year around $156 million, and it now has about 650 employees, of which 300 are engineers. But the kinds of customers he has built Metaswitch's business on aren't necessarily the same ones that will take advantage of its most leading-edge capabilities.
Lazar, then, is looking at a future where Metaswitch could very well become less of a telecom infrastructure provider and more of a Web-scale, network service enabler. To stay relevant in that context, Metaswitch would have to court over-the-top providers that aren't phone companies, don't own telecom networks, and are the very companies poised to take revenues from Metaswitch's oldest customers.
A Four Point Plan
Lazar's first priority, though, is to focus his business. He used his keynote here to declare that Metaswitch will solidify its position as a premium name in VoIP infrastructure. That is Metaswitch's main business now, and larger firms like Genband Inc. , Ericsson AB (Nasdaq: ERIC) and others are currently in command of more market share. But product managers in sessions here are frequently citing higher quality calls and simpler software interfaces as living proof that Metaswitch has a distinct market advantage, even if they're not shipping as many boxes as competitors.
The next item in Lazar's strategy is to take advantage of the business services market. How? By better enabling telcos of all sizes to sell hosted business voice services to enterprises and giving them a way to add value along the way.
At this show I'm introduced to Integra Telecom Inc. , which is using Metaswitch gear to provide a hosted voice service to businesses in its 35 metro markets. Such capabilities could enable Integra to go to war with other telcos, selling business voice and related hosted services in territories where it doesn't have facilities.
Integra execs say that a hosted solution is a "marginal, but meaningful improvement" in the business when compared to the economics of selling a managed PBX service. But competition someday may require Integra to be more flexible and to consider wholesaling services or competing outright in other markets, and this is sort of an insurance policy.
The third part of Lazar's plan is to position Metaswitch as a solid alternative supplier in the session border controller market, which Acme Packet Inc. (Nasdaq: APKT) dominates. He noted that he's "blown away" by the level of complacency he gets when talking to service providers about denial of service attacks. "You can't predict what's going to hit you," he told the crowd here.
Finally, Lazar wants Metaswitch to, on behalf of its customers, clarify what the cloud means. In step with that item, Martin Taylor, Metaswitch's CTO, used his keynote to outline how Metaswitch, which now sells its products via specialized hardware, will move to standard, commodity servers, then to virtualized servers and, finally, to services that are designed specially for the cloud.
For the rest of the story, go to Page 2.