The Session Controllers Report examines the role this new breed of equipment is playing as VOIP and other multimedia IP services make an increasing impact on the telecom sector.
It also identifies key startups and major vendors that have a stakeholding in this growing sector, and finds that Acme Packet, Kagoor Networks, and NexTone Communications Inc. have strong combinations of technology, customers, and funding.
So why are these session controllers so hot? While having a wide range of associated functions, the core role of these session controllers (sometimes called session border controllers), is to enable IP sessions to traverse the borders of separate IP networks and to bypass corporate firewalls that would otherwise block the IP packets. This capability makes secure and high quality VOIP calls, for example, a possibility.
The report finds that while VOIP service providers need such products now so they can launch new IP services, it's likely that much of the functionality they offer (including additional features such as topology hiding, security, and mediation for billing) are likely to be incorporated into firewalls and softswitches in the future.
This leaves the core group of eight startups that feature in the report a limited time during which to build a carrier customer base and then either strike some OEM deals with larger vendors, develop their strategy into new and niche areas, or be acquired by the incumbent infrastructure vendors.
Some of those major players are already moving in on the startups' territory. Alcatel SA (NYSE: ALA; Paris: CGEP:PA), for example, has already acquired session controller technology (see Alcatel Buys Some VOIP Security), while Nortel Networks Corp. (NYSE/Toronto: NT) has developed its own solution inhouse.
Siemens AG (NYSE: SI; Frankfurt: SIE), meanwhile, has adopted a different approach by striking a technology partnership and taking an equity stake in Kagoor.
But it's Cisco Systems Inc. (Nasdaq: CSCO) that the startups are watching most closely. They believe that it's only a matter of time before the IP networking giant adds to its long list of acquisitions and buys one of these startups, with NexTone Communications Inc. standing out as the favorite target, according to the report.
But while market consolidation looks on the cards in the future, there's business to be won right now, as shown by new market statistics from Infonetics Research Inc.. It says that spending on session controllers grew by 359 percent in 2003 compared with 2002, though only to $29 million.
The startups examined in the report are:
- Acme Packet
- Ingate Systems AB
- Jasomi Networks
- Kagoor Networks
- Netrake Corp.
- Newport Networks Ltd.
- NexTone Communications Inc.
- Ridgeway Systems & Software Inc.
Publicly-listed vendors profiled are:
Alcatel, Cisco, Lucent Technologies Inc. (NYSE: LU), Nortel, Siemens, and Sonus Networks Inc. (Nasdaq: SONS).
— Ray Le Maistre, International Editor, Boardwatch
For more on this topic, see the latest Light Reading Insider report: Session Controllers Report. Annual single-user subscriptions to Light Reading Insider – which include access to the current report, the complete archives, and each of the monthly reports issued over the next 12 months – are available for $1,250.
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