StarVox Morphs Into IP Voice Provider

The IP Centrix developer, turned service provider, hopes to cash in on the migration of businesses toward VOIP

October 20, 2005

2 Min Read
StarVox  Morphs Into IP Voice Provider

"Vox" means voice in Latin. "Novus" means new.

So here we have a case of the reborn startup: One time IP Centrex developer StarVox Communications Inc. has reinvented itself for the VOIP age as an IP service provider for businesses, and at least three VCs are betting $9 million that new model will pay off.

The San Jose, Calif.-based company yesterday announced that Novus Ventures, Deutsche Suisse Asset Management, and Trinad Capital Master Fund led the new round of funding.

StarVox says it will use the new capital to expand its customer base of wholesale and retail business customers “through internal growth and acquisitions.” (See VOIP Service Revenues to Hit $20B.)

StarVox Communications' earlier permutation, known simply as StarVox Inc., launched in 1997 and apparently burned through around $40 million in venture capital before turning out the lights at the end of 2002. The company's flagship product was a "virtual" PBX application server called "StarGate."

StarVox's current VP of marketing, Rich Barry, would not say whether the old StarVox ever reached profitability during its five-year lifespan, though he ought to know -- he was the CEO back then.

Flash forward to August 2005. StarVox Communications Inc. has "acquired" the StarGate IP Centrex product, as well as a domestic IP network from an unnamed source, and the international IP termination business of New Global Telecom Inc. And presto-chango! A new IP service provider is born.

StarVox's main business today is VOIP trunking for U.S. businesses. The company substitutes a VOIP gateway for its clients' wireline local and long-distance connections, then routes the traffic packet-style over the StarVox domestic and international networks, Barry says.

This is all invisible to the client, according to Barry: The existing telephony infrastructure and phones in the office or office building stay the same, but the phone bill is less. (See VOIP: Continental Drift?) The company did not disclose the number of business clients now using its trunking services.

StarVox also leverages its hard-won experience in IP Centrex services in its 2005 version. The company makes a business in wholesale hosting of the services for retail IP Centrex providers, Barry says.

Barry says his company's domestic network is composed of redundant softswitch sites collocated at {dirlink 5|212} offices and connected via an IP VPN backbone. The 200 POP site network is backed up by an MPLS-based ATM backbone in case the IP network goes down, Barry says. (See StarVox Offers Wholesale VOIP and StarVox Picks Veraz .)

He claims StarVox's international network is now used by some 50 carriers to terminate IP traffic around the world. (See StarVox Buys NGT Wholesale Unit.)

StarVox now employs 23 people, mainly in Dallas, where most of its softswitches are located.

— Mark Sullivan, Reporter, Light Reading

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