Sbc

NextPoint Networks

Doug Mohney — Thu, 13 Nov 2008 10:30:18 -0500

Founded: December 2007, shotgun wedding of NexTone and Reef Point Systems

Status: Assimilated by GENBAND, September 2008

What did it do: Number #2 in SBC market share, FMC, DPI

Website: www.nextpointnetworks.com

The companies making up NextPoint Networks (not to be confused with Nextpoint, the litigation software firm) burned through an estimated $150 million in venture capital before merging.

An initial merger announcement scheduled to take place at in October 2007 in Boston transmogrified into a "working relationship" between the two companies; a formal merger finally took place in December 2007 with a wedding gift of $20 million in venture money.

Haughty announcements of "We're not cutting jobs, we're adding them" followed the completion of the merger in January 2008, but the energy surge seemed to peak at CTIA - followed by various outsourcing and job cuts over the summer to shape up the company to be sold off.

At its peak, NexTone held the number 2 position in the SBC market, while Reef Point seemed to develop a lot of products. We never heard anyone in the FMC world say they lost sleep at night about what Reef Point was doing.

Still, NextPoint had the only SBC technology and customer base worth having, but we're dying to know how much GENBAND paid to acquire the company. Did GENBAND pay something around our guess at list price ($150-170 million) or get a discount as the credit markets started to tighten?

Acme Packet reports slight slowdown in 3Q results

Pete Wylie — Fri, 07 Nov 2008 09:46:08 -0500

Acme Packet, the Burlington, Mass.-based session border controller manufacturer, announced fiscal third quarter results showing revenues were up 11 percent sequentially from the second quarter of 2008 and down year-over-year.

Acme Packet reported $28.4 million in revenue for the third quarter 2008, and $85.7 million in year-to-date revenue. Acme Packet slipped slightly in trading yesterday, down to $3.80 per share from its opening price of $4.20 per share.

A company spokesperson cited the economic slowdown as a cause of the slightly lower revenues, but maintained that the company's gross margin was still strong and capex was being managed prudently through the soft economic period.

The company slightly adjusted guidance for the rest of the fiscal year, bringing the high end of its revenue forecast down to $118 million from $119 million, and adjusted its expected revenue from interest up to between $3.4 and 3.6 million from its previous estimate of $3 million.

Acme Packet also announced it has repurchased 6.3 million shares of its common stock for an aggregate price of $35.8 million through Nov. 5, 2008.

For more:
- see the company release here

Related articles
Acme Packet: Canary in the (VoIP) Coal Mine?
Acme Packet new Net-Net product offering
FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet

Acme Packet new Net-Net product offering

Pete Wylie — Tue, 16 Sep 2008 09:19:17 -0400

Acme Packet announced today the release of the Net-Net 4500, an intermediate SBC offering that will sit between its existing Net-Net 4250 and 9000 products. In most configurations, the Net-Net 4500 has more than 100 percent more capacity for calls per second, media streaming and IPsec tunnel capacity than the 4000 series.

The improved performance ability of the Net-Net 4500 will benefit service providers facing ever-increasing demands on their networks as subscriber bases increase and the total number of data streams balloons.

In addition to cutting costs due to its increased performance ability and processing power, the Net-Net 4500 is more energy efficient as its redesigned power supply system uses far less energy than the 4000 series, according to Jonathan Zarkower, director of product marketing for Acme Packet.

"The Net-Net 4500 has undergone significant field testing, where it produced valid performance numbers, and we have completed its beta deployment," Zarkower said.

Zarkower said some of the Tier 1 customers Acme Packet already serves have seen increased performance and subscriber satisfaction after implementing the Net-Net 4500. He also mentioned the potential benefits of using the Net-Net 4500 to support public service security gateways and WiFi.

Acme Packet initially planned to include a prominent customer who beta tested the product in the Net-Net 4500's release materials, but decided to launch without. Zarkower declined to comment on the lead users of Net-Net 4500.

Given Acme Packet's present market share of over 50 percent of the SBC space and long list of customers, expect implementation of the Net-Net 4500 to be wide-spread as VoIP continues to replace TDM communications within enterprise space.

For more:
- see the Net-Net 4500 release here

FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet

Pete Wylie — Mon, 25 Aug 2008 16:40:47 -0400

FierceVoIP: Acme Packet recently released its second quarter financials, and you were quoted as saying they were disappointing, but that you weren't overly concerned with revenue not meeting initial projections. Are you still optimistic about Acme Packet's growth?

Ory: Absolutely, we believe we have the best product, coupled with the thought leadership, experience and security to provide the best service possible for our clients.

We had some sales get pushed back into the third quarter, which contributed to the adjusted revenue projection. And overall, just the way we primarily go after Tier 1 companies, their adaptation rates are a little slower, but the purchases are usually much bigger, which can lead the market to be rather lumpy.

FierceVoIP: Company literature states that Acme Packet works with 29 of the top 30 Tier 1 companies. Do you see any competitor's entering into that space in the near future?

Ory: I just don't see another company matching the product first of all. I sincerely believe Acme Packet has the best session border control product on the market; in addition, I think we have by far the highest penetration and a great relationship with our customer base. We offer more connection with more markets than any of our competitors, and that really goes back to our inception eight years ago.

FierceVoIP: How so?

Ory: Well, while other players in our market were going after the smaller carriers, the more entrepreneurial ones, we were focusing on the Tier 1 companies. And over time it became apparent that the larger carriers had the customer base and the infrastructure that required a lot of session border control servers.

FierceVoIP: What level of adoption of the Net-Net 9000 client have you seen so far?

Ory: We are definitely seeing the Top 10 beginning to purchase it more. The 4000 model is still the workhorse and it gets deployed more often, but some of the bigger companies are really seeing the advantage of the 9000 because the larger telcos are used to big iron and gateway, and it has really useful features, like in-box redundancy and better signaling and media capacity. The 9000 is certainly better-suited for anyone with DSP requirements.

FierceVoIP: Recently, you said Acme Packet does about 40 percent of its business in the U.S. and 60 percent internationally, do you see those percentages staying pretty much the same going forward, or do you see a shift toward either market?

Ory: Well, I'd say it's closer to a 50-50 split between the two now. When big deals go through it can skew the numbers one way or another, but I say its pretty close to half-domestic, half-international. APAC and CALA are doing well, as the cost of doing business in these regions trends down, the value proposition, in places like Mexico and Brazil, is really expanding.

FierceVoIP: Where do you see the VoIP industry going in the next 5 to 10 years?

Ory: I think in 10 years, maybe even 5 years, the bulk, if not all, of our communications are going to be IP. Whether you're in your home, car or office, it's all going to be digitized and sent by packet over IP. The problem then enters in, "How can I trust this line?"

For example, if I wanted to make a call to a bank to make a big transaction for my business, I'm not going to use Skype, it's just not secure enough for that type of call. So customers really have to form trust and find quality in the type of IP they use for each type of communication. I think what you will have is companies and carriers building out closed, privately managed signal networks, and there is going to be a lot of need for session border control in that environment. So in short, I think we see a Layer 5 session-oriented build out in the next five years.

FierceVoIP: There is quite an opportunity there, any specific areas you see as first adopters?

Ory: I think the enterprise and call center markets are really ripe for growth. They want to move to IP to lower cost and improve disaster recovery. I think they will turn to trusted carriers for the reliability and security, back to the trust issue, and we will be primed to offer the session border control so these communications can be both cost-effective and secure.

Acme Packet: Canary in the (VoIP) Coal Mine?

Doug Mohney — Tue, 08 Jul 2008 14:52:10 -0400

Last week, Acme Packet announced its second quarter revenues didn't match projections. Is Acme's shortfall indicative of a flu for the VoIP industry?

Acme's second quarter revenue missed projected estimates by 25 percent. The company blamed a combination of factors, including a delay in the closing of some deals and a surge of shipments in the last days of the quarter that didn't allow them to count the results on the books for recognition.

Some analysts say Acme's more than $8 million shortfall implies that the first 10 to 11 weeks of the quarter were "exceeding weak." Since Acme's SBC is vitally involved in global VoIP infrastructure and Acme has over 50 percent of the SBC market, analysts believe the company's performance is a bellweather for the rest of the industry.

Others say they have no hard evidence of weakeness in the VoIP trunking market, but North America could be softer than other markets due to economic conditions. Some optimistic VoIP suppliers argue shrinking enterprise budgets could help their sales since implementing VoIP can offer cost reductions.

Service provider Cbeyond's upcoming quarterly results may provide a clearer picture of market trends. In February, Cbeyond warned of some softness in the small and medium business sector it serves.

For more:
- TelephonyOnline worries Acme slowdown means slowdown for VoIP

Related articles:
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Acme Packet Reports 10 Quarters of Growth, No Change for '08 Outlook
The SBC: People just don't understand

Acme Packet Reports 10 Quarters of Growth, No Change for '08 Outlook

Doug Mohney — Sat, 10 May 2008 20:33:50 -0400

Acme Packet, the Big Kahuna of SBC solutions, announced its first quarter results and updated its business outlook for the year. First quarter revenues grew to a record $31.7 million, an increase of 26 percent compared to $25.1 million a year ago. Net income on a non-GAAP basis was $6.1 million, 9 cents per share on a dilated basis, up 1 cent per share.

Acme is on a roll, marking its 10th quarter of both sequential and year-over-year revenue growth. The company believes, given its strong start to the year, it is "well positioned" to deliver on its full year growth plans for 2008. Its optimistic forecast includes an improvement on GAAP net income for the year to be up 1 cent per share, from 29 cents to 33 cents per share on a diluted basis. Total revenues for 2008 range between $142 million and $147 million, not changing from the previous forecast.

For more:
- Review Acme Packet's 1Q08 Financials