MetaSwitch Gears Up for VOIP Boom

Softswitch vendor MetaSwitch has adapted its product offering to target larger, VOIP-focused U.S. competitive carriers as it chases a greater share of the Class 5 replacement market.

A division of privately held Data Connection Ltd. (DCL), MetaSwitch claimed a stellar 2004, more than doubling its switch deployments (see Data Connection Reports Record Revenues). And the firm is expecting a bumper 2005, with revenues likely to double last year's tally, says Martin Taylor, MetaSwitch VP of technology strategy.

The year is off to a good start, as Taylor says MetaSwitch has landed two major carrier deals of more than 14 switches apiece, and a contract with a major CLEC that plans to migrate more than 300,000 of its 750,000 voice lines to VOIP. All three deals will ship in 2005, he says.

Now it has launched a new product, the CA9020 call agent server. Announced on Monday, the CA9020 could help MetaSwitch target larger service providers looking to deploy a distributed architecture, where a centralized call agent manages a number of media gateways nearer the edge of the network (see MetaSwitch Expands Softswitch Portfolio).

To date, MetaSwitch has been marketing its VP3510 softswitch, which combines a call agent and gateway in a single chassis. The company has shipped more than 90 of these, including 47 in 2004 alone, Taylor says (see MetaSwitch Announces Softswitch Customers, AMA.TechTel Deploys Ciena, MetaSwitch, and MetaSwitch Sees Softswitch Success ).

The CA9020 will broaden MetaSwitch's appeal, he adds, helping to attract the firm's target market of Tier 2 and Tier 3 carriers in the U.S., Canada, and the Caribbean that are buying into the distributed approach.

The move makes sense, says Graham Beniston, analyst at large for Heavy Reading: "They're going from the integrated to the distributed architecture, and have a good, solid technical base to do that with. They've used the integrated platform as a Trojan Horse to get into the carriers, and now they have the next stage to move forward with.

"I can see them doing well. And the relationship with Fujitsu is a good start in Europe," Beniston adds.

Fujitsu Telecommunications Europe Ltd. comprises the vendor's only OEM relationship, one based on a deployment at one of Fujitsu's DSLAM customers, BT Group plc (NYSE: BT; London: BTA). BT is using the MetaSwitch platform to offer VOIP services to the broadband customers of its cable operator rivals (see Fujitsu Supplies VOIP to BT).

And Fujitsu Telecommunications Europe's director of business development, Marc Curtis, is clear why MetaSwitch was chosen as a partner. "We wanted a next-generation network voice platform that was a true Class 5 switch replacement and which had the look and feel of the PSTN with carrier-grade reliability. MetaSwitch was the only company that could meet our requirements," he says

But opportunities in the U.K., where MetaSwitch's technical development takes place, are limited compared with the U.S. market, which remains the firm's primary target. Taylor figures there are about 50 ILECs and CLECs with between 30,000 and 1 million voice lines, representing a $1 billion Class 5 replacement market. Greenfield developments would add to that pool.

He adds that the distributed architecture is very well suited to the U.S.'s regulatory environment. "In the U.S. you're not allowed to put a switch, anything with call processing capabilities, in a collocation cage, but you can put a media gateway there," says Taylor. That means the new product could sit centrally and the firm's standalone MG3510 media gateway could sit in collocation points.

But there's no shortage of competition in this market, with Lucent Technologies Inc. (NYSE: LU), courtesy of its Telica softswitch, and Nortel Networks Ltd. (NYSE/Toronto: NT) looking to defend their installed bases of circuit switches.

Taylor does his best disparage Telica's prospects ("People worry about what will happen because of what has happened in the past" with Lucent's acquisitions and softswitch strategy) and to diss at least part of Tekelec Inc.'s (Nasdaq: TKLC) portfolio ("The competition is coming from the Santera product, as Taqua appears to have disappeared"). (See Telica: Lucent's Good Buy, Lucent Performs Softswitch U-Turn, Tekelec Tests Softswitch Waters, and Tekelec Is Buying Taqua.)

Taylor also names CopperCom as a major competitor -- and he should know, having worked there (see MetaSwitch Hires VP).

CopperCom, which has been piling on new customers of late -- bringing its total to more than 90 customers and "way more than a hundred" switches deployed, according to a spokeswoman -- likewise regards MetaSwitch as a serious rival (see Mitchell Uses CopperCom for VOIP, Ponderosa Chooses CopperCom, and CopperCom Wins 100th Deal). The spokeswoman says the company encounters MetaSwitch in the majority of competitive situations. And, like MetaSwitch, CopperCom sees 2005 as a key year for Class 5 replacement business.

So what's next for MetaSwitch? There are no plans for an IPO or a sale, says Taylor. "We have no need for a financial event that would disrupt our strategy."

Instead the firm will expand its professional services offerings, continue to invest in R&D and product support, and address VOIP security issues as a key development area. More immediately, MetaSwitch plans to launch a SIP messaging and application server some time in the coming weeks, based on its parent company's unified messaging platform.

— Ray Le Maistre, International News Editor, Light Reading

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fgoldstein 12/5/2012 | 3:26:27 AM
re: MetaSwitch Gears Up for VOIP Boom Disclaimer: I'm a happy Metaswitch user, going back to some beta testing.

Metaswitch isn't designed for RBOCs. The VP3-series switches are designed to be cost-effective for smaller carriers. A CLEC, a rural IOC, a cable company, or a VoIP operator -- these are companies who need a switch that comes in for the lowish six figures, well-supported. Coppercom and Taqua/Tekelec are the two main competitors with Class 5 capabilities. Lucent's Telica can probably do the job too, but to some potential users, Lucent is a scary prospect. Also, the Telica box is larger; it will grow bigger in one chassis for the big users (vs. multiple Metaswitch gateways, for instance) but probably costs more to say hello.
dljvjbsl 12/5/2012 | 3:26:27 AM
re: MetaSwitch Gears Up for VOIP Boom
If Metaswitch is the "only true" Class 5 replacement as implied by partner Fujitsu, why would Metaswitch target Tier 2 vendors?

Just what is a 'true class 5 replacement'? Does it appear to be a class 5 to the rest of the carrier's network. If so, what is the point of having it? "Come get your new IP switch. It is just like your TDM switch." Where is the benefit in that to either the carrier or its customers beyond putting some IP trunks on the class 5? Is it the idea of having colocated media gateways and central call controllers? This does not sound like a class 5 replacement
materialgirl 12/5/2012 | 3:26:27 AM
re: MetaSwitch Gears Up for VOIP Boom If Metaswitch is the "only true" Class 5 replacement as implied by partner Fujitsu, why would Metaswitch target Tier 2 vendors? Seems to me as though if they were indeed the only game in town, they would not have TIME for these folks.
Kevin Mitchell 12/5/2012 | 3:26:23 AM
re: MetaSwitch Gears Up for VOIP Boom MaterialGirl,

Fujitsu relationship is for Europe only, and really only for the BT VoDSL trial.
OldPOTS 12/5/2012 | 3:26:21 AM
re: MetaSwitch Gears Up for VOIP Boom dljvjbsl,
Most large carriers sent out RFPs for these Class 5 and Class 4 replacements more than a couple of years ago. The most poular carrier contract was for Siemens (I have no interest in them). Besides being cheaper than upgrading class 5 switches, this arrangement allowed the carriers to migrate to new technologies, such as VoIP. Now I thought that VoATM made more sense for this application because it scaled for the large class 5 switches(>100k subscribers), had better QoS (separation), and at the time priced better. But good gateways, like those mentioned in the article, could be configured either way and be economically placed in a POP from 100 to 500k subscribers.

dolguun 12/5/2012 | 3:26:08 AM
re: MetaSwitch Gears Up for VOIP Boom I'm potential metaswitch customer, what is your experience with BLCs?
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