Former Redback and Cisco executive has big plans for mid-sized vendor

February 4, 2010

4 Min Read
Redbacker DeNuccio Becomes Metaswitch CEO

Metaswitch Networks has quietly built itself into a significant player in the IP convergence vendor market, drawing on its strengths in softswitches and data protocols. This morning, the U.K.-based company is trumpeting its intentions to build further by announcing the appointment of former Redback CEO Kevin DeNuccio as its new top executive.

Current CEO John Lazar becomes chairman, replacing Metaswitch founder Ian Ferguson, who remains on the board of directors.

This new leadership team is intended to take Metaswitch to the next level as a “significant player with global scope,” says Lazar.

DeNuccio, who has served on the Metaswitch board for two years, is known for building Redback Networks Inc. into a major player in the edge router business for which Ericsson AB (Nasdaq: ERIC) was willing to pay $2.1 billion. Prior to that, he was senior vice president of Cisco Systems Inc. (Nasdaq: CSCO)’s Service Provider Division and helped build that unit’s revenues from $500 million to $4 billion in four years.

He expects to lead significant growth for Metaswitch as well, DeNuccio tells Light Reading.

“We have three product threads today, softswitch being one, where we are an industry leader, and then the applications space and the protocol division,” DeNuccio says. “We think we can double that to six product threads. We have the base and the ability to enter multiple product areas.”

Two immediate areas of expansion are into the mobile arena, through expansion of existing products into that space, and into broader global sales. Metaswitch recently announced a series of sales in the Asia/Pacific region and is also making significant program in the Latin American region, recently signing a Tier 1 service provider, DeNuccio says.

But most of the growth will be built on Metaswitch’s core values of "people strength, engineering strength, and a strong financial foundation." Metaswitch doesn’t want to become a telecom vendor powerhouse, built through consolidation, that then struggles to innovate, DeNuccio added.

“Today, the industry is in a significant consolidation phase, but only a few of the large vendors are viewed as successful. The danger of some very large players having serious problems -- à la what happened to Nortel -- is a very real phenomenon. The innovation the industry needs is not happening.”

Instead, DeNuccio plans to build on Metaswitch’s strengths in the IP world to organically grow its own product lines, taking advantage of its position in the softswitch industry and its newer MetaSphere Application Feature Server to explore new opportunities as networks and applications become more entwined.

“Social networking and the mobile Internet and smart phones are going to drive a generation of change that leaves of a lot of opportunities for us. Today, we sell through a lot of other players with software. We provide our software to 10 of the top 10 telecom equipment providers. As the networks converge, you will see us go directly into that space.”

Another key focus will be helping service providers capitalize on the information they already have to design and implement new services, DeNuccio says.

“If you look at the carriers today, they have an enormous amount of information embedded in the network they need to capitalize on to compete with top players. It is an IP challenge, to build products that can tap all of that data and massage it and create revenue-generating products for the carrier social networking.

Metaswitch believes it is uniquely positioned to develop applications for the converged IP infrastructure because of where the company is now positioned but also because of its approach, Lazar notes.

“I think we are unique in that we understand the infrastructural issues really well. We have a really good understanding of how you build scalable IP networks that migrate from legacy,” says Lazar. “We have also been innovative at the applications layer, being one of the players that understand that subscribers are now looking at things from a plethora of different devices -- laptop, TV, iPad, or next-generation business phone -- and all they want is a converged, integrated way of getting to all their services.”

Don’t expect to see Metaswitch go on a major acquisition jag, however, according to Lazar. "Our management philosophy has always been to be careful and judicious, so we will look at what we need to do, but we won’t go on a huge spending spree."

In fact, Metaswitch is very content being a mid-sized company -- smaller than the industry behemoths but much larger and more financially sound than industry startups that have generated much of the innovation in recent years, according to Lazar.

“We think the marketplace needs smaller companies with this kind of engineering expertise,” DeNuccio says.

— Carol Wilson, Chief Editor, Events, Light Reading

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