June 21, 2005
Siemens AG (NYSE: SI; Frankfurt: SIE) has stitched together a circuit-to-packet migration solution for North American carriers in an effort to boost its profile in the U.S.
The company today announced its Next Generation Exchange (NGE) solution, which comprises the Siemens Surpass hiQ 8000 softswitch, a set of "best-of-breed" gateways, and integration services from Siemens (see Siemens Takes NGE to US). Siemens won't say which gateway vendors it is working with.
"We're targeting customers who are making the step into IP and are taking steps to consolidate their networks," says Susan Schramm, VP of carrier marketing for Siemens.
The company's NGE solution will be shipping in July, and Siemens says it has already bagged Farmers Telephone Cooperative as a customer.
Siemens says it has some North American central office presence already with its installed base of Stromberg-Carlson digital voice switches. Those switches came from the merger of Siemens and GPT, a subsidiary of the U.K.-based General Electric Company that eventually morphed into Marconi Corp. plc (Nasdaq: MRCIY; London: MONI).
But this isn't meant to be just an effort to beef up existing accounts. "If all we were doing with this announcement were going after our existing base then I wouldn't even do it," Schramm says. "We see ourselves as the disrupter here."
The company aims to be disruptive to several parties, in fact. Siemens will find tough competition from the old Class 5 switch makers and equipment incumbents, such as Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Ltd. (NYSE/Toronto: NT). It will also go up against newer softswitch vendors like Tekelec Inc. (Nasdaq: TKLC) and MetaSwitch (see Italtel Gets the Softswitch Bronze).
But the Class 5 switch upgrade path isn't always free from debris, as Heavy Reading found in last year's report, VOIP: A Comprehensive Competitive Analysis of Media Gateways. "The market for softswitches will be much more fluid than that for Class 5 switches," wrote Graham Beniston, the report's author (see The Softswitch Name Game). "That means carrier customers will have more freedom to use products from different vendors. Suppliers won't be able to count as heavily on after-sale software revenues from the carrier market."
While dozens of vendors are in the business of circuit-to-packet migration, Siemens sees itself as different in several ways. For one thing, it has a history of doing integration projects for big carriers (see KPN Picks Siemens for Convergence). And it's one of many vendors these days claiming the mantle of "open" solutions -- meaning, in this case, that carriers can use its softswitch without being forced to buy its media gateways.
"There are a lot of vendors out there that attend the standards bodies meetings and use the information as nothing more than a launching point for their own customizations," says Jim Cassady, director of carrier network solutions at Siemens. He declined to name specific vendors guilty of hijacking standards.
The company also makes claims to some significant softswitch success amongst cable MSOs. About 40 percent of all deployed, billable VOIP lines at cable providers are carried by Siemens switches, Schramm claims (see Siemens Wins Dutch VOIP Deal).
For carriers, the difference in switching to IP-based equipment and services isn't mired in futuristic applications, according to Schramm. The immediate appeal lies in giving consumers and businesses more control over their communications services. For the residential market, for example, consumers like to be able to view their bill online, control their call-forwarding, and manage calendar applications that work with their mobile phones.
"Calling your refrigerator to have it tell you what to buy is not on the early application list," Schramm says.
— Phil Harvey, News Editor, Light Reading
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