I attended Dialogic�s analyst conference this week in New York and wanted to summarize my thoughts here. It was a pretty short event, but well worthwhile on a few fronts. It�s a manageable amount of time to get the key messages and network with their key execs, but not be away for too long. New York is always a great location, and for most of us, the highlight was the Yankee Stadium tour on Tuesday. I have a separate post coming about that along with some photos, so let�s move on.
CEO Nick Jensen did a nice job updating us on their business, and how the integration of Cantata is coming along. They had a series of exec presentations as well as partner presentations from Ascendant and Sonus. No major news, but very helpful for getting beyond the standard analyst briefings. It was also an interesting mix of industry and equity analysts, and they did a good job of speaking to each audience. We want to know about market forecasts and they want to know about earnings.
One of their key messages was that Dialogic may have many elements, but the business focus is clear. Their basic positioning is to be a leading provider of converged communications building blocks at the network edge. More specifically, media gateways, signalling gateways, media servers, etc. Nick made it clear they were not in the applications business. Dialogic�s value comes from enabling carriers to increase ARPU via nextgen services � ultimately provided by other vendors. He also noted consolidation as a key driver for their acquisition of Cantata. I�m with him there. Tier 1 vendors are consolidating their partner base, and Dialogic needs to scale up to stay at the front of the line with the likes of Sonus, Ericsson, Alcatel-Lucent, Nortel, etc.
Nick also made a couple of other comments that I found interesting. First is that service providers are migrating to IP slower than we�d all like to see, and cited how 85% of AT&T�s enterprise traffic is still TDM. The PSTN has a lot of life left, and he sees it being with us at least another 10 years. From this, the key idea is that we�re going to be living in a world of hybrid IP/TDM network deployments for a long time. This means lots of complexity to sort out, and media gateways aren�t going away any time soon. This is all good news for the likes of Dialogic.
The second comment was his view that session border controller vendors cannot last as a standalone category. There is some truth to this, and it�s certainly consistent with their product mix. I don�t fully agree, at least in the case of Acme Packet, and to a lesser extent, NextPoint and Covergence. If TDM really is sticking around this long, I can see his logic, as the ramp up time will simply be too long for most of these vendors to make it.
I also enjoyed the update on Dialogic Media Labs. They�ve got a strong focus on video, and it was nice to hear some concurrence about what I�ve been saying about Cisco�s heavy push in this direction. It�s all about bandwidth to support QoS across multiple formats and endpoints, and their view is that by bringing the cost per port down, they can do their part to drive the growth everyone is expecting. When this happens, their vision for video becomes practical � video SMS, video conferencing, video gaming, video IVR, etc.
On the enterprise side, they reiterated that fax is still a big and growing business. It�s hard to believe in this day and age, but I certainly heard this both in the presentations and over drinks, dinner and the shuttle to and from Yankee Stadium.
There was also some discussion about unified communications, definitely the flavor du jour in IP. I�m on the UC bandwagon, and what I heard here was similar to the messaging earlier this week at the Dimension Data event. They�re both saying that Cisco and Microsoft are driving this market, but neither has all the pieces. No argument there, but nice to get the double validation. Nick added the next layer, saying that the opportunity is for other vendors to build UC applications that integrate with either or both vendors. This isn�t rocket science, but it�s tacit recognition about how hard it�s going to be to go up against these guys.
My only question is about the apps. Jim Machi explained how the market is going to need more SOA-capable products/apps to �address the collision� of Web 2.0 and voice services. It�s clear to me they see the market opportunity around apps, and am just wondering if they�re limiting themselves by staying out of that arena. If they are poking around the edges, they weren�t saying much about it. Time will tell, I guess, but on the whole, as consolidation plays go, I came away feeling that they got this one right.
Coda � I usually post photos of these events, and I actually took quite a few. Inexplicably, my Nokia N81 is acting up in ways I don�t understand, and even though the photos are in memory, they�re showing up scrambled or not at all. This has never happened with any of my Nokia phones, and I�m losing a lot of sleep over it. Photos of the event would have been nice, but it�s the Yankee Stadium photos I�m really P-O�d about. As you�ll see on my upcoming post, I salvaged quite a few good ones, but there are many others that may never come back.
Posted by jonarnold at April 17, 2008 11:52 AM
Nick Jenson�s comment on the future of Session Border Controllers is accurate but it�s also so painfully obvious that it feels a little like a PR gimmick. Why? Because all technology segments evolve over time, at one time Cisco sold only routers and Microsoft sold only BASIC. Session Border Controllers initially came to market to solve a set of fundamental enablement issues � NAT Traversal, Topology hiding, Call Admission Control, etc. - related to VoIP. We are now at a time where Cisco has embedded SBC features in their new Cisco Aggregation Services Router (ASR) 1000 Series and other companies are doing the same. This should be great news, not only for SBC vendors, but all those who sell products and services designed to help customers get the most from IP-based real-time communications and collaboration. Enablement is the first step in a journey to make voice a managed service on an IP network. There is a direct correlation between the ease with which customers can enable real-time traffic to traverse boundaries and the speed at which customers will be willing to move from TDM to VoIP. And the more customers move to VoIP and UC, the greater the opportunity for innovation that will help them address the issues that prevent the expected ROI from these investments: PBX consolidation, uniform policy enforcement across multi-modal sessions, routing ALL intra-company traffic over the WAN, and communication-enabling applications to name but a few. At Covergence, we say bring it on!
Posted by: Rod Hodgman at April 18, 2008 05:22 PM