x
Policy + charging

Operax Scores $15 Million

Bandwidth management technology specialist Operax AB has landed $15 million in its third round of funding as the company seeks to capitalize on what it claims is a surge in carrier demand for quality of service (QOS) capabilities. (See Nomura Backs Operax.)

The new round is led by the Technology Private Equity Group of Nomura International , while previous backers Nordic Venture Partners Management ApS , Innovacom , and Emano AB also chipped in.

Operax CEO Anders Lindén won't disclose details of his company's previous funding, but says this is the biggest single round to date.

So why has Operax secured this new round? Because its niche market sector is just about as hot as they come.

The Swedish firm has developed a bandwidth management platform, known as BM5500, for fixed-line carriers that is based on standards developed by the TISPAN (Telecoms & Internet Converged Services & Protocols for Advanced Networks) group within the European Telecommunications Standards Institute (ETSI) .

TISPAN has focused on extending the IP Multimedia Subsystem (IMS) standards -- developed originally for mobile operators -- to make them relevant to wireline carriers, and on developing a reference architecture for PSTN carriers planning to migrate to IP-based networks. (See The Role of IMS in PSTN-to-VOIP Migration and ETSI Issues NGN.)

The specific TISPAN function on which Operax has based its product development is the RACS (Resource Admission Control Subsystem), which performs policy and admission control based on bandwidth availability, so enabling QOS control on a per-session basis. (See Tispan: IMS Plus, Operax Talks Up QOS, and Policy Control Heats Up.)

In plain English, that means the company will enable service providers to offer different levels of service depending on the type of application, and charge for it. For example, video and gaming could receive priority in the network.

And, according to Lindén, carriers the world over want this capability to help deliver new services. "Now there's a real market to deal with. There's a clear move by carriers, and not only in Europe but in the U.S. and in Asia, towards adopting ETSI TISPAN as the standard of choice [for fixed network NGNs]," says the CEO.

"There has been a big change since the beginning of the year. A number of Tier 1 carriers have issued RFXs [request for information/proposals/quotations] as they're looking at their first IMS-based architectures, and at IPTV and video on demand. IMS and video are the main drivers. We need more money to address all these opportunities."

So far, the company has secured some major engagements with large European carriers. And, while Operax is still saying it can't name those customers, Light Reading has already identified them as BT Group plc (NYSE: BT; London: BTA), Orange (NYSE: FTE), and Telecom Italia (TIM) . (See Sources: Operax Scores With Tier 1 Carriers.)

Now things are heating up globally. Lindén says "there's a lot of activity in the U.S. We will have some news very soon about that. We're engaged with a few Tier 1s, and we know them all. Our people in the U.S. are extremely active." (See Operax Opens in DC.)

And in Asia/Pacific? "We thought Korea would be the first to adopt, and have been working there for a few years, but China and Japan have emerged as the leading markets, and we have a major field trial in Japan starting in the first quarter of 2007. This is why we need the new round -– we need funding to back up our developments in the U.S. and Asia."

The money will be used to add to the company's current staff of 60, and "we'll be working on building up our channels, too, on partnerships. As the RFXs were being issued we had a great many companies approaching us, wanting us to be part of their bids, but we'd like to work with a few focused vendor partners -- not too many -- and a few big systems integrators."

The CEO is also cautious about naming his current partners, but Ericsson AB (Nasdaq: ERIC) is known to be a major partner, having taken Operax into France Telecom.

Some of the cash will also be plowed into new product development. "We have an aggressive roadmap, including fixed/mobile convergence [FMC]. It's not here yet, but we're starting to see requirements about how carriers can address FMC at the control plane," says Lindén.

Surely Operax doesn't have this market to itself, though? There's certainly no shortage of companies that have similar policy management-based capabilities, including Bridgewater Systems Corp. (Toronto: BWC), ECI Telecom Ltd. , Redknee Inc. (Toronto TSX: RKN), and Tazz Networks Inc. (See Cisco Tangos With Tazz, ECI Intros ShadeTree, and Broadband Policy Servers.)

Lindén says his company's speciality is the RACS compliance, and he believes that, despite claims by large vendors such as Alcatel (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU) to have TISPAN products, Operax is still the only company to have a "carrier-grade, commercially available RACS product in the market right now." (See Lucent Focuses on Acuity.)

Heavy Reading analyst Caroline Chappell, who wrote a report on policy management earlier this year, also believes Operax has a lead in the market. "It's difficult to get a grip on where companies like Lucent are at the moment, but it's clear there is a lot of interest in Operax right now, and it probably has more opportunities than it can deal with at present. It has a product that has been seen to work." (See Policy Control Is Key and Operax Claims Approval.)

Chappell believes there's also going to be a competitive threat from some OSS companies that are looking to extend their capabilities from the service assurance sector and into policy management and bandwidth control, but she notes that "they have a lot of work to do to become IMS compliant. They are way behind Operax."

The analyst adds: "I'm surprised Operax hasn't been snapped up."

So, has Lindén had any takeover offers? "I can't comment on that, but I can say that we want to be an independent company." The CEO says that, as RACS addresses common capabilities that involve having to work alongside many different companies, remaining independent is the best way to maximize business opportunities, "and we see a good appreciation of that."

— Ray Le Maistre, International News Editor, Light Reading

OldPOTS 12/5/2012 | 3:40:08 AM
re: Operax Scores $15 Million Sounds like ATM SPVCs to me.
-Resource (CAC) Routed (PNNI) sessions (PVCs)
Now I have always been a fan of that.

OP
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE