Dialogic: TDM Lives! SBCs doomed! Shopping! UC domination!

Dialogic says there's a whole bunch of TDM hardware supporting businesses and enterprises and it'll be around for the next "five to 10 years," said CEO Nick Jensen. Speaking before an audience of analysts and media at a company-sponsored briefing in New York, Jensen cited AT&T numbers where the carrier reported 85 percent of traffic for the enterprise was still carried on TDM. 

"[IP network conversion] is not going anywhere near the speed of light most of the research analysts wrote about six, seven years ago."  While more people are buying IP, there's still a lot of installed TDM equipment in carriers.  There's a similar situation in the enterprise, but Jensen expects the IP voice business to continue to grow while TDM revenues slowly decline.

While not a public company, Dialogic has engaged in a general discussion on its finances and where it expects to be in the future. Last year, the company brought in $193 million in revenues with $28 million on the EBIDA line. In 2008, the company expects to have revenues of around $250 million "without acquisitions" and to be "north of $40 million" in profits.

Turning to the future of the session border controller (SBC), Jensen doesn't see much of a future for the pure-play SBC. "There are some great companies out there … but they're going to have to add a media play or do something else. Over the next five you're not going to have a stand alone SBC," he said. "From a tech point of view it makes a lot of sense as well. You have everything on a single box."

From an acquisitions standpoint, it's a buyer's market, with valuations on companies down and venture money tight. Dialogic anticipates making "a couple" of acquisitions this year, shopping for companies in the deep packet inspection (DPI) and security space, potentially in the media gateway arena. "Any company below $100 million [in value] is at risk," stated Jensen. Carriers want to deal with stable companies and purportedly have forced smaller companies to merge. "There are a number of good and interesting companies out there," with technology but without a customer base. Dialogic hasn't been shy, first purchasing Intel's media business when it was Eicon, then acquiring Cantata and OpenMediaLabs.

Turning to unified communications, Microsoft and Cisco continue to drive the market. Major corporations look at Microsoft to provide a solution for the desktop or Cisco to provide a solution for a network, so "there's a drive to both angles."  Some customers don't want to be completely owned by one company, so they choose to go with the other for diversity purposes. "The two are the dominant players over the next five to 10 years," he said. Jensen expects a host of new applications being created by third-party developers once a UC infrastructure takes root in the enterprise space.

For more:
- Dialogic acquisition of Cantata in perspective by iLocus
- Dialogic acquires OpenMediaLabs press release

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