The entire communications industry is experiencing colossal change as both businesses and consumers continue to adopt IP as their primary means of communication. Much of this change is being driven by SIP-based converged communications. In fact, at ITEXPO in San Diego last month, hardly a moment passed when the terms “convergence” or “mobility” were unheard. Indeed, they were the subjects of many a keynote and conference session.
As a developer of SIP-based softphones for the service provider community, CounterPath is among the many companies that has enjoyed recent growth, driven by the changes and developments in the communications industry. The Vancouver-based firm is also keenly aware that change is certain to continue and that developers and service providers alike must remain focused on what ultimately matters — the end user experience.
I had a chance to speak with Donovan Jones, who heads up the sales, marketing, development, and operations activities at CounterPath. Donovan explained some of the factors that drive growth in the communications space, as well as how ongoing change plays out in the relationship between developers, service providers, and end users.
RT: Your company has gone through a period of growth. To what do you credit that progress?
DJ: We’ve had five quarters of consecutive 20% growth, so we are pretty excited, and I think there are four real factors driving that growth. There’s the strength of our engineering team; we really have some of the most capable guys in the industry, and when you have a core set of people like we do, they can really punch above their weight. We’re able to do a lot of things that we wouldn’t necessarily do with other teams.
We also have a high quality product, which has been in the market since 2003 — the founders focused on SIP very early. Many people face challenges six months to a year after launching a product, because it gets laden down with bugs, but through a lot of comprehensive testing, we have beaten the bugs out of our product pretty well. Our product also has been downloaded more than two million times, so it’s got a following, a recognized brand. When you look at SIP, it allows you to interoperate with the large infrastructure providers, like Alcatel (News - Alert)
, Siemens, Lucent, Nortel, Cisco.
Change in the market has also been a factor. Everybody talked about IP taking off from a telco perspective and from the consumer perspective a few years ago — we’re seeing it now and we are positioned very well to take advantage of the growth. There are all kinds of statistics, but a 50% year over year increase in broadband households in the U.S. shows how adoption is being driven from the consumer level.
The fourth factor is probably our strategy. Five quarters ago, we said we were going to focus on service providers, cable companies, OEMs, and large ITSPs, and we were going to build around our core engineering team and our core products. We were going to build capabilities to deliver to those segments, with our customer engineering team, our sales team, and our support team all serving them — and we’ve had pretty good success.
RT: You’ve recently had some major customer wins. Can you talk about them briefly?
DJ: Tying into our strategy of focusing on large service providers, cable companies, and OEMs, I’ll mention three. British Telecom is one of the world’s most recognized brands and certainly one of the leading brands in Europe; we launched product with them in late June. They’ve got a softphone, called BT Softphone, and it’s our technology powering it. This is the start of something really significant with BT, which is in the middle of a complete network and architecture refresh, a project called 21CN, and I think they are spending around $18 billion on network infrastructure, maybe more.
At the end of July, coinciding with our 10k filing, we disclosed Cisco as a customer. Our software development kit is being used in a number of their offerings, including the Unified Communicator product. We are very excited about that relationship. Then, in September, we helped AT&T bring its softphone, part of the Call Vantage service line, to market, adding another globally recognized brand.
These new relationships are truly a testament to our engineering team, which was able to give each of these companies a carrier-grade product that really fits with what they’re looking to do in the market.
RT: How does your relationship with
Intrado (News - Alert)
benefit your customers and fit into your business plan?
DJ: Intrado is really pioneering E-911 solutions, and is at the heart of recent
FCC (News - Alert)
requirements for carriers. Given our strategic focus on helping these large carriers get the right kind of SIP-based products and solutions in the hands of their customers, it’s a natural fit. It allows our customers to get a solution out quickly — and the Intrado solution works.
In terms of our business model, we see ourselves focused on delivering carrier-grade SIP applications to carriers. These need to go through substantial interoperability testing, and they need to meet all of the high-level feature requirements as well as basic core requirements, like 911. When you think about what the technology does, it enables our softphone to integrate directly with Intrado’s systems to automatically know when a 911 call is made.
That 911 call can be directed to the appropriate PSAP and emergency operators can link the caller’s location with the number, which is very important when you start talking about the mobility offered by a cell phone or by a SIP-based application. You need to be able to really track these people down when they’re making 911 calls.
RT: How has the growing demand for mobility and wireless IP services affected Counterpath?
DJ: This is driving a lot of the interest in this space and a lot of what you hear around fixed/mobile convergence, a lot of what is being touted by the new IMS providers. We’ve had a product, the Pocket PC, in the market for some time. We’re really focusing on tightening up our desktop offer around Windows, Mac, and Linux. We’re focused on the next step, which is an embedded solution.
Windows Mobile 5 is certainly at the forefront there. We’ve got several partnerships with FMC-focused companies on delivering kind of a converged user experience across an application running on the desktop and an application running on a mobile device. So if you think about Windows Mobile 5 and then Windows XP and you blend the experience, so that wherever you are, you get to have all of your contacts, you get to have all of the way you’ve set up your experience independent of devices. We’re very much focused on pushing our application onto mobile devices.
IPTV (News - Alert)
is at the forefront of many service providers minds. How does that fit into your product set?
DJ: This is actually an interesting question. We actually recently demoed an IPTV solution running in our application. We see IPTV as a natural extension of the real power of a SIP-based application streaming content to a panel or a flat screen or a monitor running off of a very high powered server. So this, for us, is certainly an interesting opportunity.
From the market perspective, I think we are not quite there. I think that the kind of server that you’d need in your house in order to really deliver the high-quality content isn’t quite there. That set-top box is a little further ahead, but, in terms of IPTV, it’s absolutely on the roadmap. Our carrier customers are looking at ways of working with their customers set to stave off, if you will, the cable companies who are coming at them from the voice services side. They want to come at them from the streaming content side, and that is very interesting for us and you will see more in the coming months and quarters.
RT: What can we expect from CounterPath in the coming months?
DJ: You’re going to see continued execution of our plan. We’ve, for five quarters, been locked on this plan, which is to build solutions and support capabilities around our core product and focus them on large carriers and OEMs. This is going to continue to roll out. On the product side, you’re going to see Frontier, which is a code name for a new version of our user interface. That will be very interesting.
Frontier has a contact-based look and feel. EyeBeam, the product that’s out there now is a dial-pad centric user interface. We’re going to have a contact-centric user interface and we think that it will create a lot more flexibility, in terms of creating different integration with, say, CRM packages or streaming content like IPTV through the user interface. We don’t have the same challenges that we had with eyeBeam, where the dial-pad is kind of static and everything happens on the wings. This you can collapse, you can expand, you can create, you can take it down to just a toolbar, you can actually, from the user side, use the software however you like. It can be your entire desktop, it can be just in your toolbar, and you can still have all of the great user experience for making calls. We are pretty excited about that.
You are going to see mobile and embedded approaches for us as we move with some of our partners and all of our product and solution lines into the embedded mobile space. We’ve already got a great Mac story. You’ll see more of this with Frontier. We are working with a number of our partners on really implementing this. It’s been nice to have, and now we’re really pushing it and our partners and customers are quite receptive to our approach.
RT: How do you envision the IP communications world evolving in the next five years?
DJ: That is a combination of I and we — we being the company and I being me. I think it’s going to be more about the consumer, the end user. Traditionally, you’ve seen this IP space evolve such that the providers have tried to replicate a TDM or legacy experience using VoIP. They’ve, in fact, taken what I think is a far superior technology in all kinds of different facets, and dumbed it down, almost making it appear cheaper, completely changing the value proposition. What I actually think they are missing is it actually is about the experience. When you create the richness of an application and then you start to use it, it becomes very interesting for how things are going to evolve.
The other thing that’s important here is once users become more receptive to applications, it will open up the way people communicate. You’ll get to select exactly how you prefer to communicate. You won’t be forced to use or a particular handset or a particular desktop unit, and so forth. Rather, you’ll be able to use whatever device you like. You can have one presence-enabled, and then you can do what some people are talking about, which is to go from your LAN at home to an EV-DO network while you’re in transit to your high-speed LAN at work, all on one device.
You’ll be able to use applications to do file transfer, file sharing, you’ll be able to integrate with your CRM package like our product does now where you’ll be able to make calls from within the CRM package as well as integrate it with what you’re doing. You’ll be able to do multiple IMs, multiple chats, video conferences at the same time, put them up on a plasma screen, have presentations. It’s really going to be about the flexibility that’s afforded by the technology and then by what the user really wants.
I think the users are going to have more and more control in determining how an infrastructure company, like Cisco, builds. From the service provider perspective, there’s going to be a real initial influx of different kinds of service, from
Google (News - Alert)
offering Google-Talk, to someone like AT&T offering IM and streaming content, and many others, all going after the same set of users. It’s going to be quite interesting.
Initially it will be a proliferation and then we probably will start to see some consolidation, but it will be centered around what people want. The companies that are going to be successful are really going to need to understand the needs of consumers and the needs of businesses and really deliver tight value proposition around those needs, because the access to information and the access to choice is really going to be more and more in the hands of consumers, particularly when you start to think about the way IP is rolling out.
Rich Tehrani is President and Editor in Chief at TMC.
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