Genband 86s the S4
The S4's end comes because of a technology acquisition Genband made from Siemens AG (NYSE: SI; Frankfurt: SIE) earlier this month, according to Genbad officials. The company announced it has acquired the DCO (Digital Central Office) business from Siemens. That consisted of the old Stromberg-Carlson circuit switches that are scattered across several North American independent operating companies (IOCs) and serving about 2 million access lines. (See GenBand Buys Siemens Unit.)
Genband won't say what it paid for the lot, but the company did move 27 employees over from Siemens as part of the deal.
So why bag the S4? It has to do with a technology acquisition made as part of the deal, say Genband officials. Siemens gave Genband an exclusive license to provide open interfaces to its EWSD installed base -- a group of some 1,100 switching systems worldwide that serve some 12 million access lines.
Siemens will continue providing EWSD sales and support. But the new licensing deal makes Genband the exclusive provider of technology to softswitch-enable those old EWSD lines, according to Genband officials.
The DCO buy and EWSD licensing gives Genband the ability to migrate more than 14 million Siemens DCO and EWSD voice switching lines to softswitch call control. Using its G6 media gateway, carriers can connect the proprietary line bays on the DCO or EWSD to a standards-based softswitch.
Apparently that arrangement -- coupled with the fact that Genband was about to start shipping the S4 -- made some carriers and Genband partners nervous. So Genband says it has conceded that business in return for being a "more open" partner to companies like Lucent Technologies Inc. (NYSE: LU), Nortel Networks Ltd. , Metaswitch Networks , Sonus Networks Inc. (Nasdaq: SONS), Tekelec , and others who might provide softswitches for Siemens EWSD customers.
"Discontinuing the sale of the S4 product removes a perceived competitive hurdle to complete the partnerships with these leading softswitch vendors," says Genband's senior director of marketing, Frederick Reynolds. "This strategy will allow Genband to focus our efforts on a consistent product line that can be sold to large or small carriers, across all markets."
For Genband, dropping the S4 is a small deal compared to its technology purchase from Siemens and the included licensing deal. Genband was a one-product company just a few years ago, and of late it has been making small, focused purchases to give it entrée into every business surrounding its flagship media gateway, with the exception of session border controllers.
Siemens, meanwhile, is apparently retreating from the North American telecoms market. After hyping its ability to transition carriers to packet networks and its ability to dominate fiber to the home access, the German giant has now turned tail in both areas and shed its businesses. (See Siemens Enters BPON Business, Siemens Unveils VOIP Package, and Siemens Sells ONT Biz.)
— Phil Harvey, News Editor, Light Reading