While the services businesses provider their customers evolve over time, and as the underlying technologies they use to deliver those services also evolve, one thing that does not change is the need for reliable, robust network equipment. After all, should a company’s critical network-based applications go down — whether by design or mishap — the effects can have a resounding negative impact on the business. Therefore, it is imperative they ensure the reliability and continuous availability of their servers.
Stratus Technologies helps businesses address this need for uptime and reliability with its fault-tolerant server line — including eight of the world’s top ten banks and 14 of the top 20 telecom service providers. Having been in the business for more than a quarter century, and having recently increased its market reach with the acquisition of Emergent Network Solutions, Stratus has seen the communications space evolve and mature over that span and has a good vantage point for surveying market needs now and going forward.
Rich recently had the pleasure to speak with Ali Kafel, Stratus’ vice president of telecommunications about how Stratus has changed over the years with the communications industry, and how it is approaching the market today.
RT: You were with Stratus through most of the 1990s, then rejoined them in 2003. How has the company changed?
AK: In some ways, it has changed; in other ways, it hasn’t. What hasn’t changed is Stratus’ singular focus on providing products and services that require continuous availability. In telecom, we still have among the industry’s best and most reliable fault-tolerant servers, only now they are Xeon processor-based and support Red Hat Linux and Windows. Also, our customer orientation has always been to provide solutions. The types of solutions Stratus now provides represent the biggest change. Today’s solutions are targeted at protocol conversion, service mediation, NGN, and VoIP, while being IMS compatible. They have much greater software content and less hardware. We also have solutions for Tier 2 and Tier 3 service providers, in addition to our traditional Tier 1 Telecom Equipment Manufacturers (TEMs) and carriers. Today, emerging carriers and IP service providers are very willing to evaluate and buy from non-TEMs, and they tend to act quickly.
RT: Stratus is more than a telco company. Do the other units of Stratus provide your business with any advantages?
AK: Telecommunications is one of three strategic business units. The others are continuously available server technology, and Solution Services for end-to-end IT infrastructure. As I mentioned, technology for continuous availability is at the heart of what we do. Telecom and our enterprise business share the same common hardware architecture, which we then tailor for the performance demands of either market — NEBS compliance, DC power, etc. So, engineering and R&D investments are spread across a larger base. Customers increasingly want professional services, too, to improve the resiliency and continuity of operations. So, yes, combining our telecom business with our platform and solution services units allows us to offer one-stop shopping for customers who want to deal with a single vendor.
RT: You acquired Emergent Network Solutions in August 2006. Describe Emergent and the rationale for purchasing it?
AK: In just five years, Emergent built an impressive portfolio of carrier-grade IP-based telephony solutions for VoIP, multimedia and session control, a multi-national distribution network, and a worldwide installed base of about 130 customers. Emergent’s CEO Nathan Franzmeier (now Stratus’ vice president of emerging network solutions) had an outstanding engineering team — real problem solvers. As you know, Stratus’ strengths centered more on traditional SS7 and Intelligent Network (IN) solutions for Tier 1 service providers. Emergent’s focus on VoIP/IMS and Tiers 2 and 3 was completely complementary to Stratus and gave us access to a very hot and growing market. Stratus provided Emergent with a well-developed infrastructure, a global reputation and resources to help it grow more quickly and broadly. With regards to your previous question, our large enterprise computing customers will also be fertile ground for bundled VoIP solutions.
RT: Describe Stratus’ telecom market strategy today, as it relates to FMC, VoIP, and IMS.
AK: At a high level, our strategy is to provide innovative and highly reliable convergence solutions that leverage existing services, where possible, and reduce time to market and complexity. Coupling our SS7/IN experience with our newly acquired IP communications experience is key to delivering next generation integrated voice, video, and data applications.
Three years ago, we thought the FMC market was ready to pop. We were readying SIP-based products, like our mobile call convergence offering. In hindsight, we see that FMC is joined at the hip with advancements in handsets, which, for FMC, have been excruciatingly slow in coming. So instead of fixed/mobile convergence, some vendors today offer fixed/mobile “substitution” with UMA, which is a poor substitute for the promise of FMC for both carriers and subscribers.
For IMS, Stratus is focused on some elements of the service and control planes rather than development of the complete suite. Consequently, we have developed products for IM-SSF, SCIM, AS, and CSCF elements. These are the evolution of our IP telephony products deployed by 100 customers. These include Softswitches (Class 4 and 5), Session Border Controllers, and various other IP telephony elements. Working with the right partners allows each of us to focus on what we can be the best at.
RT: What is the role of partners in that strategy?
AK: Partners are fundamental to our business strategy, both as technology providers and channels. As I mentioned before, we do not intend to develop the complete suite of IMS products. We focus on what we are best at, leveraging partners to supply us with complementary products or become resellers for our products. We do sell direct to carriers like Verizon and AT&T, but a majority of Tier 1 sales go through resellers, system integrators like ATOS Origin, and TEM partners like Nortel or Alcatel-Lucent. The Emergent acquisition added some 30 more Tier 2 and 3 sales partners. At times, we will find ourselves as the prime contractor on a project, subbing out to partners for particular skill sets; at other times we’ll be the subcontractor on a project. Essentially, when a solution is needed, Stratus either has the resources or will pull together partner resources to do the job with excellence.
RT: So, why does a service provider or TEM come to Stratus today?
AK: Compelling technology and ability to deliver. Stratus was a pioneer in softswitch development, even before the term was defined. A good example today is our Inter-Network Services Signaling Gateway (ISSG), a network component that links together combinations of legacy and next generation networks into a cost effective pool of shared services. ISSG will, for example, allow a CDMA service to run in a GSM network, or an IN service to work in a SIP environment saving expense and time in deploying revenue generating services.
Our size, global reach, and agility also appeal to the large switch vendors. They can look to Stratus to develop products or services that would take them too long to create, or that they’d prefer not to divert internal resources to. We are not a one-product company like many others; we have a robust portfolio for IMS-based technology and VoIP that lets us fill development gaps the big companies often have.
RT: You have a lot of market touch points… Tier 1, Tier 2, and Tier 3 providers, enterprise telephony, VoIP, legacy, software stacks, hardware. Who is your ideal customer?
AK: We are completing a project now for a cable operator in Latin America that has all the makings of an ideal customer — not because it’s a cable operator, but because of what Stratus is uniquely qualified to do for them. Deregulation is allowing this operator to become an ISP and VoIP services provider. We won the business because of the combination products, technologies and services we could bring to the party… field-proven fault-tolerant servers, professional services for solution design and implementation, VoIP, and an excellent track record. So, the ideal customer is a service provider who needs to offer new telephony services over an IP network, but also needs to interconnect to existing networks and do it fast and with high reliability. Or an equipment vendor, like an Ericsson, Nortel, or Alcatel-Lucent, who is the prime contractor for a customer solution and needs the best of breed product for a Session Border Controller (SBC), Protocol Conversion (IM-SSF) or Service Mediation (SCIM).
RT: Who are your competitors? What advantages do you have over them?
AK: I’m hard pressed to name firms who compete in our space as a solutions provider. As a telco product provider, however, there is any number of point product companies with a piece of a solution. Many tend to be smaller, relatively new companies. Others, such as Acme Packet and Nextone, are a bit more mature. Stratus, on the other hand, is truly a global company, with network products used by 14 out of 20 of the world’s largest telcos. The switch vendors view Stratus as a true partner; when they are fighting for business, they know we’re fighting right alongside to help them win.
RT: What are the biggest hurdles in the industry’s drive to full IMS deployment?
AK: Two things come to mind. First, the standards are not fully developed, and many are in draft form. That means there is ambiguity and uncertainty, which is not a healthy environment to drive investment. Second, the industry lacks compelling services to deploy. FMC could be compelling enough for a carrier to actually deploy IMS because of the applications. But, as we discussed, FMC is lagging, too. The industry was in much the same pickle ten years ago, feeling the pressure to deploy softswitches, regardless of a dearth of killer apps. The industry is subjecting itself to the same pressures today.
RT: How does Stratus help customers clear those hurdles?
AK: We really help our customers to contend with the realities of today without mortgaging the future. Our mission is to provide carriers with revenue-generating IMS-ready applications today. These include multi-device FMC, virtual office, video-enabled communications, user-defined call routing and many more. These applications help our customer protect their existing subscriber base and attract new ones, while also increasing ARPU. And we help the Tier 2 and 3 customers crack new markets with new services. There is a great deal of energy and creativity is this part of the industry, and it’s an exciting place to be.
RT: Anything more you want to add?
AK: Large companies and organizations will increasingly be deploying and managing their own telecom networks. As that happens, Stratus has a leg up on just about anyone else, given our long history serving both the enterprise and telecommunications markets. We are strongly positioned to go after this market opportunity, especially now that we have such a well-rounded product portfolio in the IP space backed by a broad spectrum of professional services. We may be going after that market with network services developed here and validated by using our own company as the test bed.
Rich Tehrani is President and Editor in Chief at TMC.
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