Interview with Shahal Khan, CEO, Centile

Application server vendors have started to scale up their shipments. We saw a successful Netcentrex acquisition and Broadsoft is supposed to be filing an IPO soon. How does that make you feel?

First and foremost, it is very good for the market. It shows that application space is now starting to take off and the market has started to move in that direction. Infrastructure is becoming more and more deployed where now carriers, enterprises and online companies that want to offer differentiated services - IMS services or converged services - are now looking at application service providers. So it is very good news for all of us in the market. It helps all of us.

If we were to do a brand awareness survey Broadsoft will score higher over Centile even in Europe. Why are European companies like yourself less market savvy?

It is a different way of doing business. It has also to do with management culture. The American management culture is very market minded and they are focused globally. Whereas European companies tend to be focused more on the regional market than on global market and are not as aggressive in sales and marketing. But now it is changing. We see now a lot of companies in Europe gearing up in terms of marketing. Centile as well is starting a large marketing campaign and we are opening offices in US, Middle East and Asia this year.

Do you have any marketing advice for Asian or European VoIP vendors in order to be seen as leading vendors in the VoIP market?

The most important advice that I can give is to focus on your market segment and be able to provide the best customer service support. It is best to start in your own region first, build regional case studies of success, build up your support organization and then utilize that in terms of marketing and sales. People in the market want to see vendors that have deployed large amounts and have done that successfully in every reference. Sales need to be supported locally by reference clients that have done large enough deployments on a large scale.

You seem to be active in the FMC market. Can you tell us a little bit about your FMC efforts and whether you are gaining any traction there?

We see more interest in GSM companies in deploying FMC service in order to pick more market from fixed line operators. We have just deployed our biggest deployment of FMC in Europe this year with the largest MVNO in Europe called Debitel.

What are your plans in the immediate future? Are you seeking a suitable exit strategy right now?

Centile has been doing business in the application server space for a long time. However we made ourselves openly available in the market since 2004. So, right now what we see is that we have a large and an open market for ourselves in Europe, Asia, Middle East and Africa. Our strategy would be to lead in the EMEA and Asian markets and become the market leader in hosted and premise based PBX, and FMC. We have a new product called click to call product with macromedia which is unique in the market. Our goal at the moment is to continue to invest in our company’s sales and marketing and to increase that. We are not looking at exit right now. The market is still very early. We want to gain more share in the market.

European companies do not seem to be keen to outsource their PBX type services. Is that a fact or a myth?

The main reason is that most of the large European companies are used to managing the PBX services. They have a lot of issues in giving out their large internal networks to carriers. We think that trend is going to continue. Most European, Asian and Middle East countries that we are in trials with are not very successful with large enterprises. However large enterprises are coming to us via IT vendors. Because of their culture of maintaining their own network and control of their own network it is likely that if there are over 500 employees, those organizations are going to deploy their own hosted PBX services. Anything under 500, then there is a possibility that the carrier may win. I think it comes down to way IT teams and telecom teams in Europe are structured and built. They want their own control over the systems.

Why is the market led to believe that IP Centrex or hosted PBX is basically a North American SMB phenomenon?

There are a few reasons for this. We have seen a lot of traction in terms of deployments by carriers in that market only. Most of the carriers have deployed this service in North America and there are not very large deployments in Europe, Africa or Middle East. The market in North America is ready for this kind of service right now. The reason being infrastructure, very high level of competition, and low barriers to entry. These features are unique to the North American market but now these are moving very quickly to Europe and other parts of the world where we see more deregulation and competition increasing. North American market has also given the carriers the opportunity to market their services little bit faster.