NXTcomm08: GenBand, a profile in unexpected success

The first major break was with Alcatel, and that got GenBand in the door on SBC’s LightSpeed project and then on Verizon’s FiOS deployment.

As part of that strategy, GenBand developed what it calls the packet line gateway for the G6, to make its media gateway immediately valuable to both the large telecom equipment makers and their service provider customers.

“As service providers transition to IP and de-commission Class 5 TDM switches, there are a number of peripherals that hang off those switches that you have to deal with – they have line frames that sit in CO that terminate copper, they have remote switches that are connected to copper lines and they have digital loop carrier systems even further out,” Vogt said. “When you take out a class 5 switch you have to have a device that can talk to all the all the peripherals and the softswitch and IMS core. We invested a lot of energy into the product line gateway so that northbound our gateways speak to a softswitch and south-bound they speak to all peripherals.”

Acquiring Siemens’ DCO assets – small rural switches originally manufactured by Stromberg-Carlson in the 1980s – and exclusive rights to interfaces to its EWSD switches enabled GenBand, and making deals with Nortel and Alcatel-Lucent positioned GenBand’s media gateway as more flexible and practical than its many rivals.

“They have some fairly unique technology with their home-grown media gateway, the G6, which was really strategically important to getting those large deployments with SBC through Alcatel,” said Joe McGarvey, analyst with Current Analysis. “They are in AT&T and Verizon, and that sort of set them up. GenBand put some interesting technology in there for flexibility, it’s very malleable and it grows with the transition so carriers can deploy it in a lot of different ways. They did a good job of adapting that to the way the industry is transitioned.”

The Tekelec deal was a horse of a different color, as that company actively sought a way to sell off the softswitch-media gateway businesses it had acquired – including assets originally from Tacqua, Santera and VocalData – but couldn’t take to profitability.

“JP Morgan called and told me the price and I told them GenBand didn’t have that kind of money,” Vogt said. In later talks directly with Tekelec, Vogt worked out a deal that gave that company a percentage of GenBand in exchange for the switching assets.

“We knew better than them what they had,” Vogt said. He divested the Tacqua piece of the business and focused Santera’s softswitch assets as a media gateway controller and not a Class 5 softswitch, which would put him in competition with his larger partners.

GenBand’s BayPackets acquisition helped position the company for fixed mobile convergence, and GenBand has moved aggressively in the wireless VoIP space – and now is moving even more aggressively in femtocells, supporting 12 different trials in Europe. Vogt is once again positioning GenBand for the future – a wireless future.

“What’s humbling, in 2005, we were a $5 million business with 90 people and one product and at the end of 2007, we have 550 people, centers of excellence R&D in 4 countries, four gateway products, 145 patents, 500 customers and $94 million in sales,” Vogt said. “What a lot of people didn’t realize – almost 50% of that revenue was represented by wireless carriers, and this year more than 50% of revenue will come from wireless carriers. We are seeing good penetration with the G9 with some of our partners.”