VoIP’s economic health the talk of VON

PHOENIX--Voice-over-IP’s economic health and its ability to raise cash were hot topics at yesterday’s Voice on the Net [VON] conference in Phoenix.

Ron Vidal, Level3’s senior vice president of new ventures and investor relations, set the show's tone during a keynote address when he mused that a year ago it was fairly easy for a start-up IP provider to get capital and “fairly easy to go back to the capital markets” when that money ran out.

Today, he added, “there’s discipline being imposed by the capital markets.”

That dreary thought had some vendors shaking their heads, although many seemed confident their customer bases were strong enough to weather the money woes.

Open Telecommunications, an Australian-based company, even has the moxie to come into the U.S. market and try to make a dent.

“We’re a profitable, publicly traded software company, so, compared to a lot of other people out there, we’re not reliant on the softswitch marketplace for our money,” said Alistair Dodwell, OT’s vice president of sales and marketing. “As a company, we are not quite able to survive without selling softswitches, it’s not critical to our company’s performance.”

So OT can hang in until money starts flowing again.

“In fact,” he added, “we put out a press release this week that said ‘What recession?’ We have 150 job vacancies right now in our main headquarters in Sydney.’”

Kathleen Meier, marketing vice president for VocalData was more pragmatic about the economic conditions facing VoIP vendors.

“Certainly the market climate relative to a year ago is tougher, more challenging,” she said. “You just have to be more selective and make your bets clearer on what service providers have the right vision, enough money and [are savvy enough] to win at this game. [You no longer] can go after the whole base.”

And Tekelec, which is trying to make inroads into the softswitch marketplace, sees the CLEC’s problems as an opportunity for the ILECs and its own products.

“The larger companies, the ILECs, IXCs, the equity markets mean something to them but it’s not nearly as high a leverage as it was to someone who was a CLEC,” said Rob Ennis, Tekelec’s packet telephony director.

“Our focus is a carrier grade, highly reliable, fault-tolerant product – one that a real carrier’s going to want and be willing to pay for,” he added. “As the market matures we’ll be there. That doesn’t mean that we’re going to sit back and rest on our laurels and say ‘Just call us when you need a softswitch.’ We’re actively promoting it,” he concluded.