FOREVER OUTSIDERS

A recent Telephony cover declared that the industry is witnessing “the end of big,” a reference to the decline of large vendors that have dominated telecom for years. The corollary to this observation is that we should see “the rise of small.” But as a bad economy lingers and service providers steadfastly tighten their belts, small vendors, with rare exceptions, may be unable to take advantage of this opportunity. At the recent Next Generation Networks conference in Boston, a top executive for one small IP vendor said, “You have Lucent, Cisco and Nortel focusing on core businesses and a few specific customers, which should be good for us, but big U.S. carriers are impossible to sell to right now.” The problem appears to be not only one of wherewithal but also willingness. Bell companies and other large carriers have reduced capex plans to ride out the rough economy, which is predictable enough. But according to many small vendors, few of these carriers will consider abandoning their traditional vendors. Again, there are rare exceptions, such as Telica, which recently busted through smothering layers of tradition to win Bell business. However, Telica was founded strictly to weather the extreme torture otherwise known as the Bell company purchasing process. Saintly patience was built into the business plan of this firm. Other small vendors are not in the same position. Many have solid technology but can't afford to wait for a year or more for business while their products are tested. These small companies, supposedly in their element while big vendors are off reorganizing their finances, do not look to have the key to the future after all. The only opportunity they may have left lies behind a wall they are ill-equipped to scale.