|
NewsGlobe: Currents
Expanding the Options
GENBAND Acquires Key Siemens Voice Assets
by Sean Buckley
Siemens’ DCO (Digital Central Office) voice switching system has a long and storied history. That history can be traced all the way back to the early years of the telephone network when one of the only alternative vendors to Ma Bell was a Rochester, NY-based vendor formerly known as Stromberg Carlson.
Since those formative years, Siemens’ DCO and the larger EWSD systems
have garnered a well-established customer installed base in both large
service providers, such as AT&T, as well as a long list of IOC network
providers.
To give existing DCO and EWSD customers a path to the IP world on
their own terms, Siemens has transferred its DCO circuit switch business
and other technology to GENBAND.
Although the financial terms of the deal were not made public, GENBAND,
an existing Siemens partner, will now acquire the DCO business including
its personnel, product portfolio and its service and support infrastructure
that spans 2,500 DCO host and remote switches in North America.
Meanwhile, Siemens will retain support, services and ownership of the
EWSD, and expects to pursue other opportunities with GENBAND for
service providers making their own IP transitions.
Joe McGarvey, Principal Analyst - Carrier IP Telephony, Current Analysis,
says the acquisition will help expand GENBAND's product line into an established customer base that’s looking
for new options.
“Though it seems a little counter-intuitive to acquire a TDM business
these days, GENBAND claims that Siemens DCO business is profitable,”
said McGarvey. “Moreover, it provides GENBAND with a built-in installed
base for future sales of its G6 media gateway, as well as multimedia
applications from Bay Packets.”
Dual Benefits
Overall, this deal has benefits for both GENBAND and Siemens alike.
For Siemens, the sale of these assets will allow the German vendor to
better focus on its own IMS initiatives, while GENBAND will get an
installed base of customers that it can sell its growing portfolio of IP-
based products to, a customer base that is looking at various options to
migrate to next-generation IP networking.
“We view this as two pieces,” said Jody Bennett, VP of Marketing for
GENBAND. “There’s the existing DCO switching business, and that
customer set is a profitable business, which is in a steady-state mode.
But the really exciting piece of this is the [DCO] customers in the existing
EWSD in North America, which consists of 12 million lines and 2 million of
DCO. With this transaction, we will now exclusively have the products
and the rights to interface into that line base to migrate these
customers to next-gen.”
McGarvey agreed: “I think it’s beneficial to both companies and not too
disruptive to the existing user base of DCOs and EWSDs in North
America,” explained McGarvey. “From Siemens perspective, the
transaction allows the company to tidy up some "loose" ends prior to its
merger with Nokia. Siemens-Nokia looks to be focusing on IMS and FMC.
I think that the North American rural market (DCOs) would just be a
distraction. Plus, there’s a good chance that GENBAND will end up selling
a lot of Siemens hiQ 8000s as the call control mechanism for this TDM
switches down the road.”
A Solutions Transition
This purchase is the latest in a string of moves GENBAND has taken to
enhance its market presence as a full-service provider of next-
generation platforms. Since taking the top CEO helm last year, former
Santera and Taqua all-star Charlie Vogt has been on a path to change
overall perception of the company.
Most recently, GENBAND purchased BayPackets and its IP-based
multimedia technology platform. Through its acquisition of BayPackets,
GENBAND gained not only a 60-person workforce and research and
development capabilities in India, but also a host of technologies that
are expected to help GENBAND crack the emerging IMS space with its
base of cable, wireline and wireless broadband customers.
McGarvey agrees that its deal with Siemens, similar to its purchase of
BayPackets, is just another part of the vendor’s ongoing transition to an
IP solutions vendor.
“GENBAND is looking to bulk up to survive in the era of massive
telecommunications equipment suppliers created through consolidation,”
said McGarvey. “This transaction provides an immediate source of
revenue as well as potential revenue connected with upgrades down the
road.”
|
