Ian McLaren, CEO, Ubiquity Software

Applications are steadily moving from softswitch platforms to application servers and yet there does not seem to be so much demand for application servers as compared to softswitches. What is happening here?

Ans: I think you are dealing with old environment versus the new architecture. All of the customers that we are engaged with have softswitches. There is nobody that we are dealing with that does not have a softswitch. Everybody in the tier 1 and tier 2 category have a softswitch. So I would turn that question around and say why are they then also looking for an application server. They are all architecting towards using application servers. It is quite simple and the softswitch implementation in the marketplace is really proprietary. However service providers are moving now at different speeds and IMS architecture calls for an application server. There are initial stages for all technologies no doubt. Softswitches have been around for several years. But application server segment is very healthy and very much in the forefront of every carriers mind.

Some application servers in VoIP do Class 4 applications like Pactolus, some do just voice mail like IPeria, some do conferencing and voice mail like IP Unity, some do presence related stuff like Sonim and yourself. Do you think the non-generic nature of application servers in VoIP is holding back the growth here?

Ans: I think that is quite natural. The names that you mentioned I would call them feature servers. We are not in the same direction as Pactolus or IPeria or IP Unity who all have feature servers and that feature happens to be specific to what they are doing with their technology e.g. putting a conferencing server on top of a media server etc. On the contrary, we have a SIP application server that fits into the IMS architecture. We partner to develop applications with third party Java and .NET community.

I would not say that products of the  companies you named are holding back the industry. They are being sold in small quantities as one-off proprietary solutions and that will continue. I would say that they are not considered to be in the mainstream of  the major architectural shift that all carriers are looking to make over next three or more years.

You have been an early advocate of IMS. What do you see your service provider customers doing in terms of IMS deployments?

Ans: Virtually every carrier in the world has an IMS program underway. There are probably 20 to 25 carriers that have made their decision on who they are going to roll out IMS with. They are in the process of going through a fairly exhaustive process of trialing products. You must have seen a number of announcements recently on carriers that have made their IMS decision. Our strategy at Ubiquity has been to be a part of those decisions. You may have noticed that we announced a couple of weeks ago that Lucent has chosen our SIP application server as part of their IMS architecture. Siemens and Nokia have done the same thing. Nortel and Huawei have also done the same. We have been selected by just about every equipment vendor with the exception of Ericsson and Alcatel.

Within the IMS trials, are service providers testing the applications across networks or are they sorting out the control plane first?

Ans:  Service providers are doing both. Carriers are going about laying down IMS architecture in the call control plane. At the same time they are using products such as our server to start prototyping and looking at a number of services. Those services could be things like VoIP or conferencing. There is a whole bunch of media push applications that are being tested. There is whole bunch of video applications that are being tested. And a number of applications will roll out over 06, 07 and 08.

Huawei ships huge volume of VoIP equipment in China. Has your partnership with them brought you any business so far?

Ans: I think it will have a significant impact on our overall revenue. We have already delivered the first relationship with Huawei at Telefonica Argentina where they are deploying Huawei’s architecture and they are using our conferencing solution on our SIP application server which is embedded into Huawei’s architecture. Huawei is going to be very aggressive in the marketplace not predominantly in China and Asia but also across many areas in Europe and Middle East.

Huawei probably have about 10 major customers outside China. Deutsche Telekom and BT are some examples. They are making good headway with their architecture outside China. Every time Huawei wins an IMS deal, we also win.

Our goal has been to work very closely with carriers and work closely with major equipment vendors as part of their architecture. We actually get implemented before IMS rolls out because they can start developing applications on our platform. Bell Canada would be a great example. We announced Bell Canada probably 18 months ago. They are developing their applications for new IP networks. They still have not decided about rolling out IMS architecture. But they are likely to select a vendor that has already pre-selected Ubiquity. They do not have too much risk there.

Who are your main partners in terms of revenue contribution?

Ans: All of the partners that we have mentioned so far (Lucent, Siemens, Motorola, Nokia, Huawei) are what we call revenue partners. They are in the process of winning their IMS architecture deals. In general we do not have any partnerships that we would not expect to be driving revenue with.

Who are the most direct competitors for Ubiquity these days?

Ans: Most of our competitors are gone now. Either they are out of business or they have been acquired. Dynamicsoft bought by Cisco and Hotsip recently got acquired by Oracle, and they were our major competitors. Our competition is really architectural. There is no question that industry is moving towards an IMS architecture and a SIP application server implementation on that IMS architecture is gaining strength.

What does FMC imply for vendors like yourself?

Ans: I think it has an exciting impact on us. The applications that you develop whether you are developing them for fixed line or wireless community or cable for that matter, we do not care. We are in a way separated from the network layer, and not locked to a wireless network or a fixed or a cable network. These applications will run either on fixed or a wireless network. So the fact that there is lot of FMC going on, to us it is very advantageous.

How do you see the application server market developing within the next 5 years in VoIP?

Ans: I expect the application server business size to be somewhere around 5 to 6 billion dollars over the next five years. It is a sizeable market. I think what is really going to evolve it very quickly is carriers starting to find out how quickly they can develop their own applications. But more importantly the third party software development community realizing that if they come to the industry under a common standards based architecture, then they can get access to Lucent or Siemens environment etc. If you are the carrier you can leverage that community and you are hoping that those individual equipment vendors will bring you the applications and you are able to find them yourself.

Has the IPO helped you in any way?

Ans: We thought about either continuing with the funding that we had or to go to private financing or go to AIM market. We chose to list on AIM because it was a good route for our business model. There is definitely some overhead of being a public company but it also sent a message that we were a serious company that was going to be in the game for a long run.