VeriSign resurrects convergence

There have been numerous developments during the last few years that have turned the phrase “one step closer to convergence” into a cliché. VeriSign's $1.2 billion acquisition of Illuminet Holdings last week could turn it into a reality.

VeriSign, a provider of Internet trust services and keeper of the most familiar domain-name registries, is buying a company that gives it access to more than 900 telecom companies, the SS7 network, local number portability databases and clearinghouse services. An examination of these assets has experts asking themselves why they didn't see the deal coming.

'We have always felt that, as the move to next-generation networks took place, you'd see that access more in native IP.' --Roger Moore, Illuminet

“Now that they've done it, I see that it's not far off their core strategies, if you think about it from a high enough level,” said Karl Whitelock, OSS program manager for Stratecast Partners.

Transforming the high-level vision of convergence to a workable solution has proved to be one of the industry's toughest challenges, but VeriSign President and CEO Stratton Sclavos believes he has the problem licked.

“We can build a new generation of services that could change the performance and economics of intelligent network services such as local number portability and pooling,” Sclavos said. “And we expect to deliver on all these synergies in 2002.”

'We can build a new generation of services that could change the performance and economics of intelligent network services....' --Stratton Sclavos, VeriSign

To do that, Sclavos has to build some bridges. Internet technologies have not always been welcome in the telephony network, particularly when it involves signaling. But if convergence of the Internet and public network is going to happen, this may be a necessary and important step. And it may help to have a telecom insider such as Illuminet to smooth the way.

“Illuminet's customer base tends to be very traditional telcos that are cautious regarding potential changes to their networks,” said David Fraley, analyst for Gartner Dataquest. “Illuminet as a trusted business partner will be very beneficial to VeriSign and the telcos in deploying convergence technology.”

It also may help that Illuminet already has begun traveling the Internet path.

“Historically, we provide database lookups by actually accessing them through the signaling network,” said Roger Moore, president and CEO of Illuminet. “We have always felt that, as the move to next-generation networks took place, you'd see that access more in native IP.”

At the close of the deal, Moore will become part of VeriSign's board of directors.

In some ways, the two companies provide similar services in parallel universes. VeriSign sets up Internet sessions and does routing through its domain name server (DNS) infrastructure, while Illuminet handles call setup and routing through the SS7 network. VeriSign provides authentication and payment services for the Internet; Illuminet provides the same and more through the intelligent network.

“Illuminet was already becoming the VeriSign of the voice network… their infrastructure, business model and financial performance are very consistent with our own,” Sclavos said.

Although some of the services each company provides are similar, connecting their universes will take some work.

“There is a logical connection there, although we are miles and years apart in terms of these two technologies doing the same thing within the same architecture,” said Larry Morres, senior manager of development, planning and analysis for Illuminet.

What's needed is a catalyst. Experts agree with VeriSign's assertion that this catalyst could be ENUM.

ENUM is a meaningless acronym but an important industry initiative that correlates telephone numbers to IP addresses using DNS registries. Several companies are conducting ENUM trials, including Telcordia Technologies — which, along with VeriSign, invested in NetNumber, a company that provides ENUM database services and software.

“For service providers to be successful in the future, they will have to utilize ENUM and other Internet-telephony technologies,” Fraley said.