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Rich Tehrani’s Executive Suite is a monthly feature in which leading executives in the VoIP/IP Communications industry discuss their company’s latest developments with TMC president Rich Tehrani as well as providing analysis on industry news and trends.

In this issue, Rich Tehrani speaks with Frank Plastina, the newly minted CEO of Tekelec.

 

Frank Plastina

 
 
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Tekelec’s Frank Plastina


What is your vision for Tekelec?

We will continue to focus on our ability to provide the session control technology into the network. What I mean by that is the layer that connects the access piece and the applications from the network. That is traditionally what Tekelec has done very well as a company. In the old world in TDM — which continues to hum along and will for quite sometime — that was really SS7 connecting the call and the media carrying the media on the call. What we’re doing is evolving the SS7 story, which will be obviously important for a while into SIGTRAN as an interim step and then eventually a SIP world and, in an IMS context, that’s essentially the CSCF or call session control function.

Around this we are building access pieces or applications that make sense using session control as the core competency. This is why we’re in softswitching and media gateways. That is why we’re now doing a lot of applications off of our traditional Eagle platform and why we’re focusing on areas that really require that session control function and knowledge to be competitive.

Have there been any surprises since you joined?

Not from a competitive position. We have a renewed appetite to look towards the future and a lot more willingness to evolve or talk about the evolution of the network. There is a renewed appetite among service providers to look and build towards the future. A few years back people were living day to day.

What do you see as Tekelec’s key strengths?

The size of our company is one of our key strengths. We are beyond a startup and have critical mass. We are also not so big that we need so many products in our portfolio to keep us growing. We can focus on what we do well with the emphasis on session control.

What do you see happening to session border control companies?

I want to delineate between session control in an IMS context — session border control is just one aspect of the overall CSCF functionality. What I see is the session border controller functionality being morphed into broader products that do a lot more. Most of these companies will be purchased or fall by the wayside as the opportunity isn’t big enough to sustain a lot of independent companies.

Even with growth in service provider market?

The growth is going to come on well beyond session border control as it is defined in those products today. Their ability to do the higher level applications and have those heavy-duty, real-time, low-latency transaction processing engines is difficult for these companies.

The functionality that some of the smaller players have will be built in, such as what we are doing on the Eagle platform.

But it appears that they are trying to go up-market.

This is difficult in the carrier market as it is a key network element and service providers are no longer interested in dealing with very small players. They want someone of sufficient enough size or they won’t deal with them at all.

Where is the opportunity for growth?

Across the portfolio, the traditional signaling business offers immediate areas of opportunity such as the evolution to SIGTRAN and the evolution of certain functionality within the Eagle platform. Things like GFLEX that does intelligent routing across the HLR base for a wireless service provider. Those are the types of apps that will keep growing our traditional Eagle base of STPs. Another one that’s a natural is local-number portability (LNP) as more and more countries mandate LNP that opens more and more opportunity for us so we can play the natural transformation of those networks just for regulatory reasons.

That is also a very good thing. There are lots of softswitch and media gateway opportunities around the world. Networks are evolving to all IP and well beyond traditional TDM functionality. However the transition story is important as the vast majority of service providers don’t have the luxury of turning off the light switch on TDM and going all IP overnight. They have to handle both forms of traffic for quite some time and our products are very well suited for that.

We are also going up-market on applications that naturally reside on these platforms such as our T6000 hosted PBX services software.

One might think Broadsoft or Sylantro would have an advantage as they focus exclusively on this market? What are your thoughts?

It depends on their go-to-market strategy and product. Most of those companies rely on OEM relationships because they don’t have softswitch or media gateway products. That is good and bad. You are really beholden to an OEM strategy and as their customer base consolidates this can be disruptive to their business. They don’t necessarily have the end customer relationship and may not know what other applications may make sense.

Is it possible these companies would make good acquisition targets?

It could be. They have done well and obviously have some interesting market share, which could be an attractive target for someone.

We’re seeing so many transactions lately.

We will continue to see more and more consolidation. This is healthy for the industry. Pricing power erodes with more players chasing fewer customers. Portal was a very big player during the boom and had a nice niche play for a bigger software company. There are those opportunities to consolidate if you are a bigger player that wants to beef up part of your portfolio.

What is Tekelec’s approach to IMS?

We are focusing on call session control functionality. This part of the network is extremely complicated — when you get to an IMS world. For example, take a basic example of bridging the gap of IN/traditional TDM services and full-blown IP services.

Say, you have a PDA that is currently running a data session, and you are on a Web site, and you want to talk to someone that requires you to call an 800 number. In an IMS context you can’t drop the data session and make the 800 call. You need to keep the session going — make the 800 call and talk to that individual while you continue to browse that particular site.

This might appear easy for the user who just clicks and makes the call, but for the network this is quite complex because it taps into the 800 services, which are hosted by an IN platform in a TDM world. It also hits servers on the IP side. It potentially hits other servers if you want to look at an audio file or get into another database. There is lots of networking traffic — essential session control traffic going back and forth — keeping the user going. And let’s say that, the user is potentially moving, for example, in a train, so there is even more signaling and authentication needed to keep track of that user.

All of this hits the session control function from our Eagle platform perspective.

How does industry consolidation impact Tekelec?

What happens through consolidation is that a lot of bigger players are created. These large players will move to higher level of service to service providers such as systems integration and more service orientation. More than supplying boxes for a network need.

As this evolves we really have a world with specific technology vendors who provide specialized or focused products on a piece of the network. This is where we are. We need to focus on what we do best — which is everything around session control.

We are the leader there now — and it opens up an interesting and profitable opportunity for us.

What are the benefits of IMS?

The benefit is quite clear. Ease of use. Any device, any service that you have today can be done anywhere you are. The fundamental benefit to the end-user is to consolidate the devices they now have and consolidate everything they use the network for — voice mail, e-mail, or anything they tap into.

The fact that this can be brought together and made transparent is very, very attractive. Obviously from a service provider perspective the complexity is maintaining the revenue and providing the services that are providing the revenue today which are largely TDM based in a lot of cases. They have to make sure that revenue is not destructed as you evolve the user to a full-blown IMS vision.

The IMS architecture makes all of these services continue on and remain meaningful as the full blown evolution to an all IP world occurs.

This will take 10–15 years and is not an overnight process. The larger service providers will be implementing a lot of transitional steps as they move from one world to an all IMS world.

The IMS opportunity seems tremendous.

The opportunity is tremendous but as an industry we have to make sure we don’t bury ourselves in the hype — let’s look at this methodically and look at every element that needs to be done to make this happen — the end game is augmenting revenue and increasing service providers’ profit first and foremost.

We can’t create an endpoint just because it sounds good and is “funky” from a technology perspective... It has to be meaningful for the customer as it makes them more profitable.

There are a number of people who have been loudly complaining about IMS, saying it is terrible and creating walled gardens. What is the truth?

It is a matter of stepping back and seeing what IMS is and isn’t. It can be an all encompassing endpoint that does seem like it creates walled gardens in certain aspects.

From a business perspective it is a standardized way to move the current world to the endpoint, which we all know is an all-IP network. We need to do this methodically as an industry or we disrupt too many services and business models that our customers and customer’s customers absolutely rely on.

Building that initial standard way to do that is important from an industry perspective. People who knock it don’t understand that if you don’t do it this way there will be 50 different flavors of how to evolve a network — and 50 flavors of nightmare interworking issues.

From an end-user perspective, everyone is going to be forced to use one method and won’t be able to talk to any other carrier. And, that’s not good for end-users.

I always argue if there is a standardized way to do it, even if it involves a transitional step and some destruction in the short term, that is better than not being able to talk between service providers because the technology is different.

RT’s Parting Thoughts

Frank is an industry veteran and has good perspective on these issues. One of the more interesting points I have been hearing from many besides Frank is that the opportunity for IMS is going to be 10-15 years long so we do need to be careful as an industry not to overhype the technology today. IMS will not be a multi-trillion dollar market in 2006! As an industry and as investors, please proceed cautiously. IMS does have tremendous potential but regardless of what market researchers will tell you, a slow and steady approach to rolling out (and investing in) IMS is best.

Rich Tehrani is President and Editor in Chief at TMC.

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