VOIP equipment provider BayPackets Inc. has nudged its way into an account with Global Crossing Holdings Ltd., supplementing gear made by incumbent provider Alcatel SA (NYSE: ALA; Paris: CGEP:PA). (See Global Crossing Picks BayPackets.)

It's quite a coup. Four-year-old BayPackets makes a next-generation service control point (SCP), a specialized piece of VOIP gear that apparently not a lot of players are focused on, including Alcatel.

Alcatel did not respond to calls by press time.

SCPs are an essential component of carrier networks. They act as a database in the SS7 signaling network that may be queried to determine how a call should be handled. For instance, an SCP is consulted to provide the translation of an 800 number to an actual phone number and to bill the owner of the 800 number for the call. Another action would be to check if a customer making a long-distance call is authorized for that service.

VOIP-enabled SCPs appear to be in short supply. Alcatel currently supplies Global Crossing with a TDM-based SCP but doesn't have the IP service control element, leaving BayPackets with enough room to slip in and win this deal.

Telcordia Technologies Inc. offers a VOIP-based SCP; and Nortel Networks Corp. (NYSE/Toronto: NT) has one that works with its Succession softswitches and TDM gear, but that's about it.

Lucent Technologies Inc. (NYSE: LU) is a strategic investor in BayPackets after ditching its own next-generation SCP (called IN Advantage) when it was exiting wireline businesses last year. It resells the BayPackets product now.

“BayPackets’ platform lets us integrate applications from our TDM network to our IP network, to manage our VOIP infrastructure and deliver new services,” says Dan Enright, executive VP of global operations at Global Crossing.

Kevin Mitchell, directing analyst at Infonetics Research Inc. points out the importance of this technology. “A critical element of this migration [to VOIP] is technology that provides a bridge between TDM and IP to squeeze value from legacy applications,” he says.

BayPackets says its SCP software works with all the major softswitch manufacturers, as it supports SIP, the emerging standard for VOIP signaling. And on the TDM side, the company has integrated the SS7 stack into its software, which it says enables it to support all the incumbent TDM switch players.

It's hoping that every carrier looking to migrate to IP will have the same problem as Global Crossing. ”Global Crossing wanted to do a lot of IP applications development themselves, to have control of the infrastructure themselves, but with their legacy infrastructure vendor they had to go back to them every time they wanted to make a change to the network, which gets very expensive,” says Amol Joshi, VP of marketing at BayPackets.

He says that because the BayPackets' product is a SIP-based application server as well a TDM-to-IP service control point, Global Crossing would not have to be locked into one vendor for supplying SIP applications.

Other BayPackets customers include Deutsche Telekom AG (NYSE: DT), Verizon Avenue (a CLEC subsidiary of Verizon Communications Inc.), and Touch America. The company has about 100 employees -- half of them in R&D in India and the rest at its headquarters in Fremont, Calif. -- and it has raised a total of $44 million in funding over three rounds. Intel Corp. (Nasdaq: INTC) is a strategic investor, as it wants to see Intel-based Linux servers gain momentum in the telecom market and BayPackets software can run on this platform. Other investors include: Anthelion Capital, Blueprint Ventures, Diamondhead Ventures, INC3 Ventures, Investcorp, TeleSoft Partners, and TL Ventures.— Jo Maitland, Senior Editor, Boardwatch