Enterprise media gateway business is dominated by Cisco. My understanding is that it is a tough business to be in unless your shipments scale significantly. Would that be a fair assessment?
Scale is important and we are looking for channels to scale our business. But I think there are a number of ways you can compete. When we looked at this product category we decided to go after the SME market. Cisco has products that serve this market segment but this is where they tend to be more vulnerable. Most of the competing media gateway vendors have not done a good job targeting the SME segment. So that is where we see an opportunity.
On the other hand, the fact that there is a big player in the market validates the potential of the segment.
Yes, Cisco’s presence validates the market potential. That is the good news. But the bad news also is that they in there. They are a 900 pound gorilla that can dominate the market. We have had to put in a lot of attention into how we compete.
What is your main focus of your product differentiation?
We believe that SMEs are really looking at UC and that is an important element for us in terms of differentiation. Our gateway is engineered to efficiently handle the UC environment providing features like routing, security, QoS, and data integration.
Why do you think Cisco has not had a competitor of their strength in enterprise media gateways? They surely do not come from voice background. I think Nortel or Alcatel-Lucent might have been able to do a better job given their voice expertise. Why is Cisco dominating the market?
Cisco came from data background and enterprises these days are data driven. VoIP is also data driven. Router is a core element in the network. So Cisco in my opinion has had a much more natural foothold than the traditional telephony companies. That said, the other large vendors are coming in strong into this space. They are making a very strong push into SME market. Nortel is doing this through their BSG initiative. One of the central tenets of that program is to compete with Cisco in the SME space. Siemens is also going after the SME in a big way. Their channels are mostly the service providers.
You market your product as multi-service gateway or a UC gateway. Apart from real-time voice, where does your gateway add value?
Our product provides Guarantee of Service capabilities by allocating bandwidth to different applications. Our QoS system enables a much higher utilization than the QoS solutions offered by other vendors. And with other vendors you have to invest in an additional box doing QoS. We also have session control capability in the solution.
What other functionalities apart from QoS and security bits do you envisage will go into media gateways going forward?
There are a couple of things we are looking to add to our product. One is utilizing the acquisition we made some months back of company offering WLAN controller. SMEs are buying a lot of WLAN products. Integrating such capability makes sense. The other solution that we might integrate is the IP PBX capability. Some of our competitors have integrated Asterisk. That is also an option for us.
For the Voice-over-WLAN related functionalities you would require a vendor partner that brings in the voice control part such as controlling the handover. Right?
Yes, we are partnering with Tango Networks and DiVitas for that.
When you say integrating IP PBX capability, you don’t mean taking something like an Asterisk platform and developing a proprietary version of your own and then licensing that forward. Do you?
No, I don’t mean that. It will be more like Asterisk-ready kind of product. It will be sold as a bundled element.
What is your understanding of the extent to which Open Source is being used in the market? Is this serious stuff for IP PBX vendors now?
I think it is a serious phenomenon. How the PBX vendors will respond to the competitive threat, I am still trying to sort that out in my own mind. Asterisk is relatively robust.
Is SIP trunking trend not a threat for you guys because SIP trunking in majority of the cases eliminates the use of premise based media gateways.
You would still need a gateway to terminate calls into PSTN. So we view that as an opportunity and are teaming up with vendors bringing SIP trunks into the enterprise premises.