SOFT SWITCHING GROWS UP

Now in its second decade, the industry's answer to the bulky Class 5 switch may not be the final piece in the evolution of switching after all.

If the softswitch was supposed to create a revolution when it was first being deployed by the likes of Level 3 Communications in the late 1990s, the repercussions of that technology upheaval are just now hitting the industry in ways that virtually no one saw coming.

No longer viewed as a revolutionary concept that is going to change the world overnight, softswitches are now being looked upon as just the next evolution in a path that began decades ago with the first manual switchboards. At the same time, the concept of what actually makes up a softswitch is radically changing.

Originally, softswitches were supposed to offer similar functionality as a traditional class 5 switch but with off-the-shelf parts and relatively standard software, making the end product not only cheaper but also taking the control out of the handful of vendors that dominated the circuit switch world. The original idea is out the door. Today's softswitch in fact bears little resemblance to those first server-based pieces installed in the pre-boom era. As bigger carriers have started deploying packet switches, they also have started to demand that softswitches start looking like something familiar — more like class 5 switches in terms of scalability and functionality, but without the cost.

ONLINE EXCLUSIVE Cable plowing ahead with softswitches by Vince Vittore TelephonyOnline.com, Oct 27 2003

Gone is the era when putting a media gateway out with support for some transport protocols would suffice. Carriers now are demanding a more comprehensive solution that includes SIP servers and signaling gateways, as well as the all-important applications and associated servers to go with the whole package.

Bell Canada offered a prime example when it announced it was going to launch a decade-long process that would convert its entire network from circuit to packet switching. Not surprisingly, the carriers picked Nortel Networks as its lead vendor. The two companies have a history that dates back almost a century. But behind the announcement, which was done with as much fanfare as could be expected out of the normally subdued Canadian carrier, was a message to vendors — “give us a package of products that resembles a Class 5 switch.” Nortel's familiarity also helped.

“Clearly, given the heavy use of Nortel technology in our network, it makes sense for us to move on an evolutionary path in this direction,” Eugene Roman, group president of systems and technology for Bell Canada, said at the time of the announcement.

Just as important, though, was Nortel's ability to meld its Succession Communication Server 2000 softswitch with its Multimedia Communication Server 5200, formerly known as the Interactive Multimedia Server. The package, while comprising the same elements as a softswitch, also provides a lot of the same functions as the circuit switches it will replace in Bell Canada's network.

“For a major service provider to adopt [softswitching], it has to be a natural evolution,” said Al Safarikas, vice president of wireline marketing for Nortel. “It needs to perform the function that service providers are used to and that includes things like 911.”

It's a message that is being taken up across the industry, and for vendors it translates into providing more than just a series of servers with SIP-based software. BellSouth, which has been migrating much of its interoffice traffic to packet networks over the past year, is looking for vendors to bring the disparate elements of softswitching together and even come up with an application or two. But it wants familiarity, too.

“What I want most is manageability and reliability,” said Bill Smith, chief product and technology officer for BellSouth. “I don't want to become the system integrator if I can help it. Otherwise, I can handle a best-of-breed approach.”

Which vendors will step up to that role is open to question. But as the market has evolved, the traditional leaders in the circuit-switched world are quickly becoming dominant in the packet environment. Incumbency, it seems, may have its advantages.

Nortel, for instance, has announced contracts over the past year with Charter Communications and Cox Communications in the cable world, as well as China Telecom, Telus, Verizon Communications and MCI. Meanwhile, Lucent Technologies has won several contracts in Asia for its softswitch and also has signed on two small independents (Valley TeleCom Group of Willcox, Ariz., and Cochrane Cooperative Telephone) for its iGen Compact Switch, which provides similar functionality but is geared for low-line counts. The company also is in the process of filing for acceptance to the all-import Rural Utilities Service list, which allows telcos to get low-cost loans to purchase equipment, according to Mary Baker, Senior Product Marketing Manager with Lucent's Convergence Unit.

One industry in which start-ups and non-traditional switching vendors are making strides, however, is wireless, where no one has the advantage of incumbency (see related sidebar below).

THE SOFTER SIDE OF WIRELESS For all their promises to transform the way traditional wireline telcos operate, softswitches are currently having their biggest impact on wireless carriers. Wireless carriers are rushing to put in softswitches because they can save the expense of backhauling traffic by moving that traffic off of wireline carriers' — often their competitors' — dedicated circuits and onto an IP network. In fact, the economics of wireless softswitches are so compelling there has been a flood of new vendor entries in the market over the past year. “The one [sales hook] that gets the biggest bite is the network optimization,” said Kathy McEwen, marketing director for Spatial Wireless, which is joined in the wireless market by start-ups such as Winphoria Networks and Starent Networks, as well as more established wireline providers like Excel Switching and Sonus Networks. If a carrier puts media gateways in base stations all over western Texas, for example, and a call server in Dallas, the connections between the various elements can be made over an IP network and the carrier saves all the backhaul costs. Additionally, everything can be managed from Dallas. Like the wireline side of the market, the move to packet switching in wireless relies heavily on revenue-generating applications. In wireless, though, they've already arrived. Among the biggest are color ring-back tones, which allow callers to pay a small fee to hear songs instead of normal ring-back tones. With softswitches, that application can be transported anywhere the user roams, said JC Murphy, president of Excel Switching. And while the service has taken off in other countries, notably Asian, most U.S. operators tend to be a little more motivated by the ability to use the distributed switching architecture to get away from traditional SS7-type services, McEwen said. “One of the big things the wireless carriers get very excited about is this hybrid of SS7 and IP, where you're not tied to the legacy SS7 services anymore,” she said. “Going to IP where they could use SIP opens up a wide range of new services.” — Vince Vittore

“Nortel and Lucent are going to make a full-court press to protect their circuit-switching position,” said John Celentano, president of Skyline Marketing Group, noting that Bell companies will likely go with a large recognized name that has more perceived stability. “We have room for maybe two or three good-sized vendors and probably some smaller players. We'll probably see Nortel and Lucent and perhaps Alcatel, which has been active in this country but has the size. Tellabs was probably way out in front of the curve [with its acquisition of Salix, which was eventually shuttered]. They may revisit it because they have the bandwidth management.”

In the independent telco market, however, vendors such as Sonus, Taqua, Telica, Tekelec's Santera unit and Gluon Networks are all capturing early adopters in the independent market that don't deploy big switches in terms of line count but combined will be replacing many more switches than the RBOCs. Newcomers like UTStarcom and Italtel, which have yet to make a dent in the U.S., also have some potential.

Taqua, which recently launched some improvements in its softswitch-on-a-card architecture is even seeing renewed interest from the long moribund CLECs.

“They know they're going to lose that UNE-P switching access soon,” said Jody Bennett, vice president of marketing and business development for the Richardson, Texas-based vendor.

Indeed, the entire financial picture for softswitch vendors is expected to improve soon after two years of sluggishness. According to a recent analysis from Probe Research, the softswitch market will grow at a compound annual rate of more than 50% from 2002 to 2008, at which point it will be worth more than $5 billion worldwide.

One of the biggest issues, particularly for start-ups, is for the evolving platforms to handle the needs of bigger carriers, said Celentano.

“A lot of the upstart vendors are coming at it from a computing point of view and not a telephony point of view,” he said. “Part of their approach is they're looking at the call-processing piece of it with distributed computing. But what do you do about the line piece of it? How do we terminate the lines on these softswitches? The upstarts still have to figure that out.”

Scalability also is rapidly becoming an issue, though most seem to recognize the need. “Two years ago, 20 busy hour calls per second was considered great,” said Ramnath Lakshmi-Ratan, senior vice president of strategy for VocalTec, one of the earliest softswitch vendors. “Today, unless you do 1.5 million to 2 million busy hour call attempts, you're not even in the game. I think it's matured more than evolved.”

VocalTec's new Essentra softswitch architecture can handle more than 2 million busy hour calls. In fact, vendors of all sizes have recently stepped up the ability to handle more calls. At last month's Voice on the Net show, Telica announced its Plexus Unified Service architecture (Plus), which can now support up to 7.5 million calls per hour, or what the company claims is five to 10 times the equivalent legacy switch.

“First-generation softswitches had severe limitations in the area of scalability,” said Bryan Sheppeck, vice president of sales for Telica.

Beyond scalability, the big issue still hanging over softswitch vendors' heads is when there will be enough new revenue-generating applications to motivate carriers to jump to packet switching. Just saving them money on the expense side of the ledger is starting the market rolling, but lack of applications will continue to hamper the overall push to packets. Initially, the big push is in IP Centrex (see story on page 30) and that has been enough to sate many vendors.

“In North America in particular, there's a lot of focus on business services,” said Dana Rasmussen, vice president of product management with Siemens Network Convergence, which is using applications from both Broadsoft and Sylantro in its Lifeworks package, which includes many softswitching elements.

Still others see enough work in aping current Class 5 services using existing network infrastructure combined with softswitches. One of the keys to Tekelec's acquisition of Santera earlier this year was the ability to package the former's SS7 interfaces and equipment with the latter's softswitch.

“We could have just done an alliance, but until you integrate the development organizations you're really not going to get the coordinated approach,” said Paul Miller, vice president of Tekelec's Packet Telephony group. “Telephony networks are not in the stage of interoperability. There are just too many problems to put that in the laps of the carriers. When we bring that solution to the carrier, it's our neck that they're going to strangle.”