Genband’s bid for Nortel’s carrier VoIP equipment business — if it succeeds — could give the vendor a more direct relationship with the world’s largest carriers than it currently enjoys through its major vendor partners. But the deal could also be seen as further solidification of the VOIP equipment space as the domain of specialist suppliers, according to Elisabeth Rainge, IDC’s director of NGN operations.
“Clearly, given Genband’s acquisitions of assets from NSN, Alcatel-Lucent and others in the past few years, it makes sense that those larger players wouldn’t have a strong interest in taking on the Nortel CVAS VoIP asset,” Rainge said in an email. “For better or for worse, what we’re seeing with this move — assuming it goes through — is that VoIP infrastructure is a market for experts. No longer is it the expertise or possibly even the bread and butter, of the traditional telecom network equipment vendors. This is partly an acknowledgement that voice is an application and partly an outcome of the state of voice infrastructure for the largest operators. In a nutshell, the IP transformation is not only underway but today’s reality. To build on IP networks means treating voice as an application.”
Acquiring assets from major vendors and using them to create products that major vendors want has been key to Genband’s success, though the novel strategy is not an easy one to pull off. Likewise, integrating Nortel’s products with its own will be no small task for Genband, Rainge said, especially since the latter’s existing portfolio is already packed with gear from previous acquisitions.
“Genband has a continuing, and now expanding challenge in product portfolio management. I don’t envy their sales team with so many acquired product lines in the fold, especially for long-lived investments such as we see in the TDM-VoIP space,” Rainge said. “There is no doubt that Genband already offers and supports many voice infrastructure solutions. In taking on the Nortel assets, Genband will need to work to position itself as a product company with its own mission rather than a caretaker of a variety of products.”
One bright side for Genband: The shedding of similar assets from major vendors means the company is unlikely to enter a bidding war for Nortel’s business with much larger rivals.