Metaswitch Makes Its LTE Apps Move

Metaswitch Networks has added to its IP applications capabilities with the acquisition of Norwegian messaging and presence systems specialist Colibria AS for an undisclosed sum. (See Metaswitch Buys Colibria.)

The move follows Metaswitch's 2010 purchase of service broker vendor AppTrigger and is part of the vendor's strategy to capitalize on the wave of value-added service platform deployments that mobile operators are in the process of making as they deploy data-centric HSPA+ and Long Term Evolution (LTE) networks. (See Metaswitch Squeezes AppTrigger.)

The two acquisitions have helped flesh out the company's three "product themes," says CEO Kevin DeNuccio. The first centers on the company's traditional VoIP capabilities; the second on SIP and session management, where AppTrigger's expertise has helped; and the third on "rich communications" -- applications that go beyond just voice and texting.

The key, says DeNuccio, is helping service providers take back control of the communications services market from the over-the-top (OTT) players as the mobile Internet, cloud capabilities and smartphone use start to dominate the market, and he believes Metaswitch now has the application platforms to help achieve that goal.

DeNuccio says Metaswitch had been investing in the in-house development of next-generation services (notably its Thrutu application), but that Colibria already had a technology suite (SIP instant messaging and presence servers, XML data management servers for address book management, and a social network gateway) that fit with its R&D strategy. (See Colibria Launches Intelligent Address Book, Colibria Gateway Gets Social , Colibria Intros SIP IM Server and Colibria Reports on Messaging.)

An acquisition made sense, says the CEO, because "we needed the capabilities in-house right now" to capitalize on the opportunities being created by the shift to next-generation mobile networks by major carriers.

And while decade-old Colibria is still a small company (27 people, revenues estimated around $10 million, growing but not profitable), it has been at the heart of Rich Communication Suite (RCS) developments, has developed strong ties with the GSM Association (GSMA) and Open Mobile Alliance (OMA) , has developed platforms that fit neatly into IMS deployments (which is handy for the voice-over-LTE market) and has forged strong relationships with Tier 1 service providers around their RCS plans that are now more likely, with Metaswitch's help, to evolve into commercial engagements. (See VoLTE Maintains Momentum, Colibria Boasts 2010 Growth, Colibria Supports RCS 2.0 and GSMA Updates Rich Comms Suite.)

Not that Colibria, which benefits from having Nokia Networks and Syniverse Technologies LLC as key channel partners, doesn't already have carrier customers: Among those already using Colibria's technology are Clearwire LLC (Nasdaq: CLWR), Telia Company , Telekom Austria AG (NYSE: TKA; Vienna: TKA), CAT Telecom Public Co. Ltd. and Wataniya Telecom (with the latter two deploying RCS servers sourced through NSN).

But the specialist needed a greater market presence to grow, and so went looking for a buyer. DeNuccio says Metaswitch was also looking to buy as it looks to be a more significant player in the mobile applications market and checked out a few acquisition options, but that Colibria was "the best fit." It was also available at an affordable price. While the financial terms of the acquisition (which closed Tuesday) haven't been revealed, Colibria's Norwegian VC investors, who have pumped €25 million (US$35.8 million) into the company during its 10-year life, won't be getting their money back, says the Metaswitch CEO. (See Metaswitch CEO: VoIP + Mobility = $$.)

Tackling the OTT threat
So how exactly can Metaswitch help operators evolve from communications dinosaurs to smart service providers?

DeNuccio believes it's all about showing the network operators how they can take back control of services and applications and offer customers something that the likes of Google, Apple and Facebook can't, and Colibria plays an important role in the proposition.

He notes that the telcos "realize they can't do things the way they've done them in the past. They know they can't keep pace." But the operators have some unique attributes that set them apart from their OTT rivals -- the trust of their customers, access to subscriber data and the ability to offer services such as multiple phone numbers that are linked to a single device and can be managed by the user with personal settings that are linked to location, time, availability, etc.

So the operators need to look at how new applications are working across their networks and bring those capabilities into the network with multi-application integration enhancements that can only be achieved within the network. But for speed-to-market, new applications can at first be offered as an OTT offering and then later housed on in-network application servers that enable additional enhancements and security.

DeNuccio uses the example of his company's Thrutu application, which enables smartphone users to share content during a voice call with just one click and (says Metaswitch) has been downloaded onto 10,000 Android devices since its launch a month ago. This is an application that currently exists as an OTT offer but can be housed on a RCS or IMS server and "plugged into the network," where it can be integrated with advanced address-book capabilities and other applications.

The same applies to social networking applications, notes DeNuccio. Smartphone users can access Facebook directly from their devices but may not want to trust Facebook with hosting a centralized personal address book. That's something the operator can offer as well as enabling users to manage all their social networking applications through a single interface, "giving customers control over the way they interact with the world."

Of course this all hinges on the operators making decisions, moving fast and breaking with tradition, three things for which they're not renowned.

But Lars Myhrum, Colibria's CEO (now general manager of Metaswitch's operations in Norway), believes the operators still have a real opportunity to remain as the key trusted service provider to their customers, especially when personal and sensitive information such as address books are involved. (See Colibria Appoints New CEO.)

"The operators need to move fast, yes, but the window of opportunity is still open," he tells Light Reading. "The carriers are moving on this. They're in a hurry" to be the ones that provide an address book that can be integrated with social networking capabilities "in a trusted way," he adds.

But can they hurry quick enough? If they do, expect DeNuccio to let us know.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 5:08:33 PM
re: Metaswitch Makes Its LTE Apps Move

This looks like a smart move by Metaswitch. It's a combination that makes sense and at a time that makes sense.

The big question is -- can the telcos rise to the challenge? DO they have the wherewithal to make something of the opportunities?

THis challenge is very closely related to the Bridging the Chasm campaign Light Reading launched earlier this year -- 

LR Launches 'Bridging the Chasm' Campaign



to make this work the telcos really need to start thinking more like online/IT services firms and not like telcos, and to do that they need some new brains inside their organizations, ones that don't have the legacy telco mentality. 


googol_byte 12/5/2012 | 5:08:22 PM
re: Metaswitch Makes Its LTE Apps Move

How could a 27-person software company not be profitable with $10M in revenue?  Either they are partying like it's 1999, or this estimate is way off....

Sign In