Showing posts with label MetaSwitch. Show all posts
Showing posts with label MetaSwitch. Show all posts

Sunday, September 18, 2011

Metaswitch "Perimeta" is a Classic Business Case Study

The entry by Metaswitch Networks into the session border control business has been described by some as a move “into a crowded market.” "Crowded" market



Metaswitch would describe it as a move into a rapidly-growing market where customers are asking for choices. According to Infonetics Research, service providers are spending $350 million a year buying SBCs. By 2015 (just four years) they will be buying $1 billion a year worth of SBCs.



Acme Packet furthermore reports gross margins of about 82 percent. Huge gross margins

“Candidly, service providers are asking for alternatives,” says Patrick Fitzgerald, Metaswitch Networks VP.



Acme Packet has for years pointed to its dominant market share. Infonetics estimated that Acme Packet had 52 percent of the SBC market in 2009,  almost four times that of any competitor. Dominant market share Dell’Oro Group in 2010 estimated hat Acme Packet had 55 percent of the SBC market.



Metaswitch says Acme Packet has 65 percent to 70 percent share of the service provider and enterprise markets for SBCs.



Some 38 Metaswitch customers already have placed orders for “Perimeta” devices, says Fitzgerald. Perimeta



In many ways, the move into the SBC market illustrates some enduring issues in business strategy. In recent days, as intellectual property lawsuits have escalated in the mobile handset business, we have gotten a reminder of the potential importance of patents and intellectual property ownership. Patent lawsuits proliferate


In fact, some believe the older pattern, where many device manufacturers simply licensed operating systems, might be changing. Some believe it is possible that the dominant pattern will be “essentially proprietary” strategies where each major platform consists of bundled OS and device, on the Apple model.



Keep in mind that Metaswitch Networks has, for many years, been a supplier of the underlying original equipment manufacturer software at the heart of an SBC. In other words, as Microsoft powers many PCs, and Android powers many smart phones, Metaswitch already powers many SBCs.



That isn’t to say the smart phone or PC OS model will develop in the SBC market, but only to suggest that intellectual property ownership confers strategic advantages that are not always immediately obvious in the earlier stages of some markets, but can emerge as strategic advantages later.



Some might note that the move into SBCs illustrates another enduring business issue, namely “channel conflict.” There are many instances in the telecommunications business where a supplier has to make difficult choices. Where a supplier operates in both the wholesale and retail parts of a business, there always is some potential for conflict between a firm’s wholesale partners and the supplier’s own retail efforts. Channel conflict


The analogy is the growing suggestion that device manufacturers ranging from HTC to Samsung might have to develop or acquire their own operating systems as other significant portions of the market evolve.



Android now has a “special” relationship with Motorola Mobility. Microsoft has a favored relationship with Nokia. Apple is Apple. Research in Motion always has used its own proprietary OS.



Some would note that Metaswitch now faces channel conflict in a way it has not, in the past. But that’s part of the enduring business strategy discussion. What should any firm do when it is an OEM supplier, and end users start asking it to develop its own retail products based on the underlying intellectual property?



It is easy to say a firm should avoid channel conflict. But there often are cases where end users (the market) asks or demands that an OEM supplier also supply retail products. There might be other cases where an OEM simply sees strategic value of such scope that some amount of channel conflict is the price to be paid for some important strategic step.



In fact, Microsoft and Google both face some degree of risk in developing favored relationships with a particular contestant in the smart phone market, even as the advantages also are clear. The point is that Metaswitch faces classic business issues of the case study sort.



The analogy is that Metaswitch supplies an operating system the way that Google or Microsoft do. Both those firms have important business models built on supplying “open” software to many partners. But both those firms also have significant relationships with a single retail brand in the end user market. Metaswitch now will have that same sort of relationship in its OEM business and as a supplier of the “Perimeta” line of SBCs.



No firm would casually risk such channel conflict were the potential rewards not large enough to offset the risk. In this case, Metaswitch is making strategic moves on a number of fronts to reposition its business. Virtually all of those moves carry some degree of risk.



But it is hard to ignore 82 percent profit margins in a retail business where the firm already supplies the intellectual property, nor a business where Metaswitch routinely has sold and installed SBCs on behalf of its retail customers for quite some time, giving it a view of the real world deployment issues and perspectives of its retail customers, in the SBC space.



It is hard to ignore a product whose value is such that sales volumes could triple in four years. And it is hard to ignore getting into a business when a firm’s customers say they want the firm to do so. Channel conflict is one sort of issue. Ignoring the clear requests of a firm’s customers is another sort of danger.



It’s a classic business case study.



Wednesday, July 7, 2010

What Keeps Service Provider Executives Awake At Night? A Service Provider Survey by Metaswitch Networks - Thoughts on Carrier Evolution - Carrier Evolution

Service provider executives surveyed by Metaswitch Networks say uncertainty about new services and revenues, plus competition, remain the top concerns over the next decade. That has been true for most of the past decade, and the survey results confirm that the search for new revenue sources and the pressure of competition remain dominant facts of life in competitive and changing marketplaces.

The significant new difference is that telecom regulators—and what they might do—now are among the top three concerns. Of the three top concerns, though, only service innovation and the organizational response to competition are under direct control.

Click the image for a larger view. 

Thursday, April 9, 2009

Telco of the Future is a Software Company

"The telco of the next five years has to be a software company," says John Lazar, MetaSwitch CEO. That statement is rich with implications for business strategy, organization, investment and priorities, but must at least incorporate the ability to "create and tear down" whole applications, service or features very rapidly, without labor-intensive physical processes. That's why MetaSwitch believes in IP Multimedia Subsystem.

The meaning does not extend as far as the notion that access networks and a range of services related to voice, data and video services will be unnecessary. What Lazar means is that since nobody really can predict what the killer app of the future is, providers simply must have the ability to react quickly when users suggest demand exists for any application that benefits from network access.  

And the access and services platform has to transcend silos. "You have to innovate quickly and build links between things," says Lazar. "Things you don't expect will stick," he notes, reminding people that  "nobody predicted SMS (text messaing) would be the huge success it hsa turned out to be."

But addressing both the current recessionary climate, which has nearly everybody reacting caustiously, Lazar also warned that some "people are not thinking ambitiously enough." There are opportunities to be seized, but action is necessary. And Lazar predicts innovators will do well in this recession.

There are constraints, to be sure. "Damn the dollars, full speed ahead" may not be a strategy many firms can embrace. But keep in mind: when somebody, or a company, says "something can't be done," you have to translate.

What the speaker means is that "I, or my organization, for a host of very-real reasons, cannot do it." That is different than saying something really cannot be done.

Other speakers may well say "something is possible, and can be done," because they do not have barriers of one sort or another that prevent them from doing something others say "cannot be done."

Over the next five years, people will do things that "cannot be done." They will be done for one simple reason. Despite a host of reasons why one contestant says something "cannot be done," others will operate without those constraints.

Monday, July 2, 2007

Convergence Spells Opportunity for Managed Services | PodTech.net: Technology and Entertainment Video Network


Convergence Spells Opportunity for Managed Services | PodTech.net: Technology and Entertainment Video Network

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

Modern computing has some virtually-universal reference metrics. For Gemini 1.5 and other large language models, tokens are a basic measure...