Wanted to share with you the latest updates to the IP Convergence TV portal, for which I serve as Editor. This will be the last update for 2008, and there's a good mix of new content you won't find anywhere else.

We've got 4 new video interviews. They're all fairly short - under 5 minutes - and each has a distinct view on various opportunities that convergence technologies are presenting to service providers.

- Mitual Mehta of tekplus

- Andrew Haworth of FMCA

- Frederic Morris of Connect World

- Carine Ziol of Comverse

For Guest Opinions, we've got a new contributor from a company many of you are familiar with - Jajah. He's got an interesting take on why voice-based applications are so important for carriers.

- Frederik Hermann, Director of Marketing

Finally, my latest Convergence Blog post focus on strategies service providers are pursuing to manage in today's difficult economic climate.

I hope you come visit the portal soon, as there's lots of other good content from a wide variety of contributors, many of whom you'll know. And if you like what's there, I'd love to hear about it!

Technorati tags: IP Convergence TV, Jon Arnold, J Arnold & Associates

Well, Day 2 is done, and so is C-Scape 2008. I really enjoyed attending, and feel lucky to be part of the scaled down group that was there in person. The overall content was quite good, and Cisco really seems to be trying hard to stay close to the analysts and listen to our thoughts on their direction.

As mentioned yesterday, a lot of the focus was on how Cisco is transforming itself into a "next generation" company (am still not sure what that term means any more) rather than how they're going to change the world around them. That said, their new tag line makes it pretty clear that's the end game - "Cisco - Best in the world. Best for the world." Got that? A bit of a throwback to GM in the 1950's, but you get the idea. If all this technology carries the day, it will be Cisco's world, and we'll just be living in it. Hey, they've got $27 billion in the bank and a lot of desperate companies at their feet, so anything is possible, right?

Am being a bit facetious here, and Cisco is being every bit as careful and pragamatic as the rest of us. I found many of the sessions down to earth, and Cisco seems very conscious of getting their house in order and focused on helping their customers leverage IT to get themselves through both good times and bad. Day 2 continued the mix of sunny keynotes and hands-on breakouts about their various business lines.

What strikes me overall is the breadth of their market coverage. Having recently been at Avaya's analyst event, it was interesting to see them talk about scaling down their business focus from some 27 lines of business to 3. Cisco was talking about managing 26 priorities - i.e. growth opportunities - so they're certainly not putting all their eggs in one basket. I highly doubt many analysts in the room - if any - can possibly be up to speed on all 26 priorities, which makes Cisco a difficult company to fully understand. Maybe it's that way by design, but listening to their top execs, you come away thinking there really is a grand plan here, and it's all under control. Sure hope so.

I'll leave you with a few photos from today...

Rob Lloyd talking about Cisco 3.0 and what this means for how they will transform the relationships they have with their customers. Pretty forward-thinking ideas here, and if executed well, will serve as best practices for others to follow.

Art Hair, CTO of Disney - very interesting presentation about the realities of making movies in the digital age and how important networks are to the process. Never thought about film-making this way, and Disney really is a great showcase for Cisco in the sense that film is the most collaborative of all art forms, and collaboration is Cisco's driving mantra now.

Charles Stucki updating us during the Telepresence breakout. Did you know that Cisco is doing over 4,000 meetings a week using Telepresence? That's got to be adding up to some serious savings in travel costs.

The best for last - final session was an open-ended Q&A/fireside chat with John Chambers. I think he enjoyed this as much as we did.

Technorati tags: Cisco C-Scape 2008, Jon Arnold

It's Day 1 at Cisco's C-Scape analyst conference in San Jose. Keeping in step with the overall economy, C-Scape is scaled down this year, but still a pretty big event.

Most of the morning was taken up with keynotes from John Chambers and new CTO, Padmasree Warrior. On the CTO front, it's quite a change from Charlie Giancarlo, who I just saw at Avaya's conference a few weeks back. I want to keep the focus on today, but feel free to search my blog for earlier entries about these changes.

Over the course of the day, there have been two types of sessions. The keynotes have generally focused on Cisco itself and how the company is evolving to be more productive in a weak economy, as well as to be driven by the Web 2.0 mantra of collaboration. On the other hand, the breakouts had more to do with their various lines of business and how they're serving customers and entering new markets.

Compared to last year, the messaging was more nuanced and less grand. The vision is not as ambitious in terms of leading the world to the promised land of seamless communications experiences, and there was not much hype about new technologies. Last year, we heard and saw a lot about Second Life, video, Telepresence, digital media and Cisco Field. There were bits and pieces about some of these, but more toned down. To me, that was a good thing.

It's a tough market for everyone, and 2008's theme for analysts seems more about how Cisco is striving to become a model company for how these technologies can be adopted. There were lots of examples of Web 2.0 applications being used internally for collaborating and knowledge management, which I thought was great. Even John Chambers is doing video blogging now.

He talked a lot about finding a balance between innovation and operational excellence. For Cisco, the latter is the priority, and when you have a well-run organization, innovation will follow. Getting this balance right is at the core of his vision for Cisco 3.0. He sees this vision not just as a strategy for Cisco itself, but also to create an environment that lets Cisco get closer to its customers. And by extension, if it works for Cisco, it will work for Cisco's customers. Good strategy.

Another big theme for Cisco's roadmap was related to "Phase II of the Internet". Sounds like Web 2.0 to me - personalization, collaboration, multimedia, social networking, etc. John Chambers talked about this being their next iteration from the "network as the platform" mantra they have been following most recently. This is a big shift for a company that still makes most of its money from routers and switches, and speaks to the transition that he and the other execs talked about to stay ahead of the market. Virtualization and cloud computing are now big topics, and Padmasree in particular connected these themes to Cisco's vision for helping customers better leverage IT for growth and productivity gains in a global marketplace.

That's it for today - will post tomorrow about Day 2. Here are a few photos of the day.

Well, this is one way to creatively trim costs. A simple bit of branding to let you know you're in the right place. This is the Cisco event - uh, Adobe's conference is down the hall. Nothing fancy, but it works. And with some clever rearranging, it could make a nice menorah. Blinded by the light...

John Chambers leads off with his keynote

Not much new being presented so far - at least compared to last year. Here's a cool twist, though. John Chambers talked a lot about the globalization of communications, and this Telepresence demo with Jim Grubb was done with a Cisco employee in Madrid. He was asked to reply in Spanish, and as you can see in the second photo, his comment was translated on the fly into English in the caption at the bottom of the screen. It's bit like watching closed captioning on TV - same idea, but more profound. Reminds me of Jajah's Babel service, and speaks to the huge opportunity that IP-based technologies has to break down the natural barrier of language for communicating.

New CTO Padmasree Warrior

Cisco customer Q&A session - HSBC, Verizon, Disney

SMB session, moderated by Rick Moran

Randy Pond - Cisco 3.0 and creating transformation through leadership

Technorati tags: Cisco C-Scape 2008, Jon Arnold

I'm an occasional contributor to Business Trends Quarterly, and they recently invited me to do a podcast on social media in the enterprise. My guest was Tim Young, the Founder and CEO of Socialcast, an interesting company in this emerging space.

We had a pretty long chat, and covered things like what Enterprise 2.0 is starting to look like, and the role that tools like social media are playing. Tim is somewhat of a pioneer in the space and talks about what companies like Socialcast are doing to help enterprises harness the potential of social media and actually get their money's worth along the way.

The podcast is quite long - about 42 minutes - so you might want to download it to your iPod and listen to it on the go. I've got two ways for you to access the file. One way is to pick up the link from my website. Just look for the Socialcast podcast on the Media Citings section of the site.

Another way is to download it directly from the BTQ website, but you have to register first to get it. If you like podcasts from a wide range of thought leaders, it's worthwhile since there's so much good content there. To find my podcast, you need to go the Web Events section of the BTQ site, then scroll down - quite a ways down actually - to Web 2.0 podcasts. It's the last topic listed there, and once you're at Web 2.0, it won't be hard to find the link, along with my photo.

Either way, I hope you give it a listen, and would love to hear your feedback.

Technorati tags: Business Trends Quarterly, Jon Arnold, Socialcast, social media, Enterprise 2.0

On Monday I'm on my way to San Jose for Cisco's 2008 C-Scape analyst conference. This will probably be my last trip for the year, and as it gets colder here by the day, San Jose isn't such a bad place to be.

I was there last year, and given the current economic climate, I suspect things will be more scaled-back next week. Cisco is being very practical and encouraging analysts to participate virtually, and we all know they have the tools to make that a viable option. The gods must like me, and I feel lucky to be going in person, and will do my best to share the highlights via my blog.

If you happen to be in San Jose next week and want to meet for a drink, I won't be hard to find!

Technorati tags: Cisco C-Scape 2008, Jon Arnold

Yesterday I attended Avaya Canada's analyst day here in Toronto. I participated last year, and it was good to gauge their progress since then. The local analyst community is pretty small, so it was a very friendly session.

For most of us, the main attraction was meeeting the new head of Avaya Canada, Gerard Baglieri. For what it's worth, he goes by the title VP/GM, so I really can't say CEO. Maybe Avaya's culture is more egalitarian than most, and maybe it's just a Canadian thing. Anyhow, Gerard is from NY, and during my 1:1 session, he strikes me as being very capable and focused, so don't let his title fool you.

I attended Avaya's global analyst event a few back in Boston, and for those of us who were there, most of yesterday was familiar territory. As such, I don't have much news to report, other than the fact that Avaya Canada seems very well aligned with the corporate storyline.

They did address some of the structural differences and dynamics of the domestic market, and how their plans to expand the channels up here will be more challenging. The difficulty with Canada is that the SMB market is more heavily skewed towards the very low end of the scale, and these businesses are often not a good fit for Avaya's offerings. Of course all vendors face that problem here, but it's fair to say Avaya will have to be more aggressive in Canada than the U.S. to achieve their stated target of driving 85% of their sales through channels within the next 3 years. Gerard has a tall order ahead, and time will tell.

We saw a variety of presentations throughout the day, and they all reinforced the core themes we saw in Boston - namely, Avaya feels they are ready now to become the #1 player, the company is now very focused on two main markets - Unified Communications and Contact Centers, and the overall business strategy is to become more channel-centric.

I elaborated on this further in my Boston post and elsewhere, and will say again that there's a good story here. Yesterday's session had both analysts and media, so there was some public coverage in the trades. I can steer you to one of these if you care to read more.

To wrap up, here are a few photos from yesterday...

Gerard Baglieri

Todd Abbott - he presented in Boston - was nice to see him come up to Toronto for this

Amir Hameed talking about contact centers

Colleague Ronald Gruia from Frost checking out the bat-phone, with a bit of a halo around him. He's special, but not that special! :-) He just happened to be standing close to the overhead light, although it sure looks like he's radiating brilliance....

Technorati tags: Avaya Canada, Jon Arnold

Been trying to get this post out all day. Scott Wharton is one of the few people I know in this space going back to 2001 when I started at Frost & Sullivan. He had a great run at BroadSoft, and it was surprising to hear him make the jump to his own startup this summer. Not only doing a startup for the first time, but moving from the East coast to the West coast to do it. That takes commitment, and he's done it on a shoestring.

His company is called Vidtel - gee, can you guess what the business is? - and today was the official launch. It's a bit like having a baby, so first off, congratulations Scott! You've got a good team behind you, about 100 trials going, the technology is ready now, the service is economical now, and maybe most importantly, video is hot. We're way beyond worrying about how we look on video now, and this isn't the 1964 World's Fair.

Sure, most people are camera-shy, but in the world of iPhone, Flckr, YouTube, Facebook, etc., it's not such a big deal any more. There's no shortage of people ready, willing and able to get onscreen at the drop of a hat. More importantly, Vidtel is about making an everyday experience - talking on the phone - a better experience. There's no shortage of friends and family-based situations where adding video to the mix would be welcome. Vidtel understands this, and the website does a nice job of explaining many of these scenarios and how they would appeal to different segments of the market.

To be clear, Vidtel is a consumer offering. It's not the videophone service that Packet8 was marketing to SMBs. This is a mass market concept, much like Vonage was in 2005. However, prices have come down, and video service like Vidtel is very affordable. The big BUT, of course, is how are you going to get customers? Scott's too savvy to fall into the Vonage trap of spending recklessly to acquire subscribers - especially in today's economy.

He'll start slow and virally, and will establish a loyal customer base and demonstrate proof of concept. That's what I'd be doing. It's not an expensive service to launch, and I'm sure the business can carry itself early on with a modest base of customers. After that, it's all about branding and scale - both of which can be addressed with capital and some sound management decisions.

I'm a fan - I have been ever since he told me about it. I'll soon be a beta user as well, and I'll be reviewing it once I've had some time to use it. Aside from spending time on Vidtel's website, I should add that Scott has a nice blog of his own, so if you want his personal take on how Vidtel came to be, you should read his post about it.

Again, congrats to you and your team, Scott, and it's great to see a startup like this come to life.

Technorati tags: Vidtel, Jon Arnold, Scott Wharton

Without sounding too much like a carnival barker, I want to share this basic info with you about eComm 2009.

The registration page just went live yesterday, so you can order your tickets now. It's a good time, since you save $600 if registering before December 22. Just click here to access the form and away you go.

But wait, there's more! Lucky readers of my blog can get an additional 20% discount by using my promotion code. So, if you take the above Super Early Bird rate, you'll save a further 20%, bringing the cost down to $952. Not bad!

Furthermore, if you miss the Early Bird rate, you can still get the 20% discount using my code up til February 17. The rates will be higher then, but at least you can get this discount.

To get this discount, just drop me a line, and I'll send you the code. Fair?

While you're on the site, you should check out the Schedule page to see the latest roster of speakers. That's probably the best validation you'll need to see why eComm will be a worthwhile experience.

Technorati tags: eComm 2009, Jon Arnold, & Associates" rel="tag">J Arnold & Associates

Fairly modest on the media front in November, but I did interviews for a bunch of stories that should run later this month.

For the business press, I was cited in a few articles...

Dallas Business Journal - Capex outlook

Computer Dealer News - Microsoft and Unified Communications

IT Business.ca - Avaya Canada's new CEO

CIO/Strategy Center - Collaboration solutions for global teams (if link does not work, soft copy available on request)

Toronto-based colleague Michael O'Neil runs the ITinCanada portal, which includes several microsites on various IT/communications topics. I contributed a guest post to their Unified Communications site about Avaya...

Avaya - Putting the Unified in Unified Communications

I also wrote two Service Provider Views columns last month, one of which ran yesterday - it got delayed due to the long weekend.

Microsoft and Service Providers - Why They Need Each Other, Part 1

Managing in a Down Economy, Part 2

Technorati tags: Service Provider Views, Jon Arnold, & Associates" rel="tag">J Arnold & Associates

My latest Service Provider Views column on TMCnet is running now, and revisits some earlier pieces I wrote about their Telco 2.0 strategy.

This column focuses on two main ideas. First - why service providers and Microsoft need each other, and second, a look at a few of the key industry trends that are transforming the role and definition of what it means to be a service provider in the Internet age.

There are a lot of interesting and timely themes to explore, and I'll be continuing in this vein over the next 1 or 2 columns. To get started, I'll steer you to today's piece, and hopefully you'll stick with me in columns that will follow it. As always, your comments and suggestions are welcome.

Technorati tags: Service Provider Views, Jon Arnold, J Arnold & Associates, TMCnet, Microsoft

The BCE privatization saga continues, and now the ball is back in BCE's court as they try to defend their valuation and trump KPMG's solvency opinion. There's a lot at stake here, and both sides are pulling out all the stops to get things to go their way. It's a bit like watching Detroit's auto execs going hat in hand to Washington for a bailout. If the deal falls apart, there are big time winners and losers, and a whole new environment for Canadian service providers.

I'm not following the minutiae of the story, but you can get a good taste of it here. It's high stakes accounting, banking and legalese, with lots of complexities around things like the criteria for determining solvency, the benchmark dates for making valuations, potential conflicts of interest for KPMG between BCE and the bankers, avoidance of paying break fees if the solvency test is the deal-killer, the impact of Canada's suddenly weak dollar, etc.

There are many angles and sub-stories here, and some will only be of local interest. In some ways BCE is better off remaining a public company, and long-standing shareholders will be happy because the huge drop in valuation this week only remains a paper loss. By staying public, BCE avoids taking on the $30+ billion in debt, which would severely restrict its ability to invest in network upgrades to remain competitive. If the deal dies, all bets are off, and BCE's competitors will have to expect a more aggressive posture from them. That in turn should keep the playing field a bit more level since BCE will be jumping back into the pool with both feet.

Not everyone out there will find the BCE story of interest, and that's fine. My main reason for posting about this is to draw attention to the challenges of valuing a telco, especially in tough economic times. I'm not an expert in business valuations, but it sure must be difficult to assess the value of the two primary assets of any telco - its subscribers and the network. BCE is a great case study since it's so public, and if I was a telco, I'd be watching this one closely. I wouldn't be at all surprised to see one or two major telcos/cablecos to falter in 2009, and they'll have the same issues to deal with. In today's world of IP communications it's much harder to place a value on the subscriber, and at some point, revenues from advertisers will be part of the mix, just like they are with the portal players like Google and Yahoo. I'm sure BCE will be a real test to determine just how well auditors can do their job in valuing service providers, and I guess we'll know once the final rulings are decided. Stay tuned.

Technorati tags: KPMG, Jon Arnold, BCE

I spent most of today attending Microsoft Canada's analyst day here in Toronto. It was led by Sean Seaton and his team, and they sure covered a lot of ground. Sean is the Director of their Communications Sector, and just about everything they talked about was of interest to me.

Today Microsoft touches every facet of communications, and the opening vision statement sums it up pretty well: "to create experiences that combine the magic of software with the power of Internet services across a world of devices."

That covers pretty much everything, and Microsoft is working very hard to straddle the worlds of software and the Web - while at the same time, steering very clear of anything to do with hardware.

We saw a series of presentations covering desktop applications, Windows Live 3, mobility, the workplace, entertainment, and Mediaroom. On its own, each of these is very interesting, but together you have tip your hat to Microsoft for being so strong in so many places.

To me, though, the strongest story was the service provider market, where they really are becoming an important player. I'd say that was the core focus for most of us in the room, so we were a pretty attentive audience. I've seen much of this before in their Telco 2.0 presentations, and written about it in some of my Service Provider Views columns.

I'm going to leave it at that for now, but will touch on many of their service provider themes in my next column, which should run on Friday. So, you'll have to come back to hear the rest of the story.

Oh - kudos also to High Road Communications for pulling this event together and hosting it at their downtown offices. They always do a good job and I'd say Microsoft is being well served by them.

Aside from this, we had a recurring distraction running all day wondering if the BCE privatization deal was going to fall apart. It was a very ugly day, as the stock fell 34% in value, driven by concerns over a negative opinion by KPMG regarding BCE's ability to meet the solvency requirements for the deal. Canada's financial sector hasn't been shaken to it core like the U.S., but the magnitude of this deal is enough to undermine confidence in our entire telecom sector. That's another post in itself, but I'll hold off until the dust settles around BCE. Phew.

Technorati tags: Microsoft Canada, Jon Arnold, BCE

In times of trouble, we often see some form of an "Aid" program pop up. Well, telecom is having its share of trouble, and I'm sure we all know people who have recently been put out of work. Nobody likes being in this position and if you've been there, then any and all forms of support are welcome.

TMC recently launched one such initiative, and I just came across it. They call it Blog Aid, and basically TMC is making its huge web reach available to out of work industry people. For those who are willing to blog, and showcase their expertise to the industry at large, TMCnet offers a pretty big stage to get their ideas across.

Sounds like a win-win to me. Telecom people looking for work have a place to be heard and perhaps network, and TMCnet gains some unique content to make their web presence that much more interesting. You can read more about it here on Rich Tehrani's blog.

Technorati tags: Blog Aid, Jon Arnold, TMCnet

Regular readers will know that I've followed Ottawa-based Iotum for a long time, and have some news to pass on for their latest incarnation, Calliflower. This is a Web 2.0-style platform that's trying to bring more intelligence and value to audio conferencing.

At the recent Under the Radar event, Calliflower had two announcements of note. First is their integration with the iPhone. This is good news for two reasons. First, it exposes Calliflower to a huge market of tech-savvy consumers, some of whom will no doubt find this service of great value. Second, since Calliflower is mainly a business application, it makes the iPhone more relevant to the enterprise market - SMBs as well - and that's a big market that Apple very much wants to crack.

Secondly, Calliflower launched its Premium service, which comes with a modest monthly fee that will be attractive to power users, especially those doing international conference calls. I believe that companies like Calliflower/Iotum need fee-based offerings to survive long term, and it's great to them do this. The introductory pricing is $50 per month for two organizers, and with this you get file sharing, and local inbound dialing for North America and 4 other countries, plus the use of Voxbone's iNum global area code (883). You can read more about it in the press release here.

There's a lot of Web 2.0 here, and you can imagine how much more engaging these calls can be, layering file sharing and IM on top of the audio service. Plus, with the flat monthly fee, the per minute dialing charges are eliminated, making conferencing much more affordable for regular users - as well as attractive to everyone else who thinks that conference calling is expensive.

Oh - if you're keen, and are among the first 400 to sign up before November 30, Calliflower will add a 3rd organizer at no extra cost.

Technorati tags: Calliflower, Jon Arnold, Iotum

Can you say SocComm 3 times fast? I can barely say it once, but that's the name of Jeff Pulver's latest event. The full name will give you more of a clue as what it's about - the Social Communications Summit, and Jeff posted about this again on Friday. It's being held in his backyard of NYC, and takes place from February 10-11.

Am not quite sure what social communications means, but anyone following Jeff's blog will know that's more or less where his energies are focused these days. With the Pulvermedia VON era officially over, you know it's not going to be about VoIP. In those days my world very much overlapped with Jeff's, but not so much now.

Still, we all have at least some focus on social communications today, whether that means voice, IM, presence, video, mashups, digital collaboration, etc. All forms of communication are social, and from there you can span out in a variety of directions to become an innovator, and eventually - hopefully - a real business.

So, if this is your passion, then you need to pay heed to Jeff's post, as he's reminding his readers that the Call for Speakers deadline is December 5. And for those of us who blog, Jeff is simply asking for support to get the word out.

Now you know, and for reference, there's a website running for the event. Is this the Jeff 3.0 we've all been wondering about? The venue hasn't been announced, but it sounds like this will be his first event in a public venue since the last VON, so we'll just have to wait and see. I'll certainly be following with interest.

Technorati tags: SocComm2009, Jon Arnold, Jeff Pulver

Agenda planning for eComm2009 has been in full swing lately, and it's been a blur of submissions followed by ongoing commentary by email among the Advisory Board. We're all busy, and with my recent travels, I've been doing my best to contribute feedback.

Anyhow, the rosted was updated the other day, and I wanted to get the word out that the program is shaping up nicely. The eComm format is different from most events, and it's all about volume, really. Most speaking slots are only 10 or 15 minutes long, so attendees will certainly get their money's worth in terms of hearing from lots and lots of smart people.

How much of this you retain is another conversation, but eComm is really about community building. There won't be any snap quizzes at the end to test if you were paying attention. You're really there to soak up as much innovative and disruptive thinking as possible, and hopefully you'll go away with at least one game-changing idea.

So, to see who's speaking so far, please visit the Conference Schedule page of the eComm website. It's a good mix of household names and unknowns, so you can expect to get perspectives that are both reality-based and not-yet-mainstream-but-will-be-soon.

I should also add that it's a tough market for conferences, but sponsors are stepping up nicely to support eComm, so a solid base of financial support is forming. Most recently, Voxeo and Skype have signed on, and join other notables sponsors, such as GIPS, Voxbone, MetaSwitch and Jaduka.

Lots more additions to come, and aside from reading posts like mine, you can get a direct pipeline to the latest news by subscribing to alerts on the eComm homepage, as well as following the eComm blog, and signing up with the eComm Facebook Group.

Technorati tags: eComm2009, Jon Arnold

Yesterday I attended Tekelec’s industry analyst day, which was held at their headquarters in Morrisville, N.C. That was a new stop for me, but very much worth the time, and should add this was their first such event. I really like this format – it’s small in scale and doesn’t take much time out of your week. Maybe 15 industry analysts – very friendly and approachable. All of us sitting around a table with their senior management team, hearing about their roadmap for both business focus and technologies.

Being a public company, Tekelec does other things with the investment analyst community, and I’m sure for them, this is a more enjoyable meeting of the minds than talking about EPS and return on capital. Every analyst covers vendors in their own way, but I think I was the only analyst in the room who blogs, so this may be the first update you’re seeing on our day.

I’m not an expert on signaling, which is their forte, but I’ve followed Tekelec for several years, and can say this is a great example of where sticking to your focus really pays off. CEO Frank Plastina set the tone by first saying one of their challenges was being better understood as a company. Of course, that’s one reason for doing these analyst events, and I definitely came away with a clear idea of their focus.

The engineers in the room had lots to talk about, but I’m in the minority here, and didn’t have much to say. Signaling gets pretty technical, and I’ll just say that Tekelec is very good at a lot of the heavy lifting that goes on in carrier networks to make sure your calls go through without missing a beat. However, on a business level, there’s a pretty clear story here, and it’s a good one that I’m happy to talk about.

Tekelec is one of those rare companies that’s a market leader among much bigger competitors, and that says a lot about what they’re doing right. They hold a 39% market share for global SS7 STP shipments and have over 300 customers in 68 countries. This includes 6 of the 10 largest wireline carriers, and 8 of the 10 largest wireless carriers. For wireless, they’re actually hitting 100% of the available market within the top 10. The two they don’t serve – China Telecom and DoCoMo – have proprietary networks and are closed to outsiders.

This global footprint gives them valuable insight into all the nuances of carrier networks, which is a key element to their success. As Frank says, this gives them a “seat at the table” for major carriers looking to better understand and manage their traffic. They’ve seen all the scenarios, and know how to work across all the variants as carriers switch between circuit and IP traffic, as well as within all flavors of signalling protocols like SIP.

Tekelec is hardly alone in terms of having a global perspective on carrier networks, but you have to admire their operating success, and this is where they stand out from the crowd. Lots of impressive performance metrics to consider, and they all paint a picture of a stable company that’s profitable, growing, and debt free. Tekelec’s stock may be down a few dollars, but there was a great slide showing how this performance compares to their peers, and it’s head and shoulders ahead of the meltdowns most other vendors are seeing in the market.

After seeing all the various presentations, I came away with a few conclusions:

First, the market for what Tekelec does isn’t going away any time soon. As Frank explained, traffic volumes are growing faster than revenues, and carriers need to keep spending money to upgrade their networks. This is a core business issue for carriers as networks seem to be in a permanent state of transition. Tekelec helps make networks run more efficiently, and their routing algorithms seem to be their secret sauce. They know their business, and there’s plenty of evidence on display around here for all their patents and intellectual property.

This is a classic engineering-driven company, and I say that in a good way. Tekelec invests 20% of operating revenue in R&D, which is well above industry norms. The payoff comes in the form of high gross margins which do not appear to be suffering in today’s difficult market. When R&D translates into profits, it truly becomes a form of competitive advantage, and in this case it looks to be sustainable.

Tekelec has maintained a clear focus around which this competitive advantage can be based. They have exited non-core businesses like switching (sold to Genband) and do not appear interested in going in new directions. You might say this is a bit boring, but if it’s not broken, don’t fix it. I’m a big fan of this strategy, and so long as they have to hold their own against bigger competitors, it’s the best way survive – and thrive.

By extension, this focus has translated into a strong balance sheet and money in the bank - $300 million, plus a $50 million revolving line ready and waiting. They explained that Tekelec has been looking for acquisitions for over a year, but are being very selective. In this market, they’re in a great position to further consolidate their space, and I’m sure they’re closely following some choice targets. Startups aren’t thinking IPO right now, and for companies like Tekelec, it’s a buyer’s market. Lucky them.

All told, I came away with a greater appreciation for what Tekelec does, and I’d be hard pressed to think of another public company in our space of comparable size in this good a shape and with such promising growth prospects.

Frank Plastina’s opening session

Wolrad Claudy, SVP Global Sales

I can get used to this. Very nice hospitality - thanks Tekelec.

Technorati tags: Tekelec, Jon Arnold

My latest column for TMCnet is running now. This edition of Service Provider Views picks up from last month's theme about how carriers are being impacted by the economy. The health of service providers determines the health of vendors, and I have some thoughts on what's happening with both.

The main idea I'm trying to get across is that despite all the bad news, there are a number of companies bucking the trend, and are doing just fine. Apple is a a true anomaly, but there are quite a few companies peforming very well while their peers struggle along.

You can read the article here, and by all means, I'd love to hear your thoughts or other good news stories I've missed.

Technorati tags: Service Provider Views, Jon Arnold, J Arnold & Associates, TMCnet

Got a short trip this week, and one that I'm looking forward to. I've been invited to attend Tekelec's Industry Analyst Day at their offices in Morrisville, N.C. Aside from having followed Tekelec for many years, I've never been to Morrisville (near RTP), so it's a new travel destination for me.

Tekelec has a long history with SS7 and today have a strong focus on IMS and SIP-based solutions. Most of what they do isn't terribly sexy - routing, ENUM, signaling, messaging and traffic management - but it's core for any nextgen network. They have a lot going on with mobile messaging, and that's an area I'm particularly keen to learn more about.

Perhaps more importantly, this is a company that's doing quite well in a down market. Their stock price is off - no surprise there - but not nearly to the extent that most telecom vendors are seeing. They just had their Q3 results, which were quite strong, and the company is on track for $500 million in revenues next year. They're definitely doing a lot of things right, and that's reflected in a couple of recent news items. First, they were just named to the Forbes list of 200 Best Small Companies, and second, they were recently added to the Standard & Poors SmallCap 600 list.

Technorati tags: Tekelec, Jon Arnold

It's late, but I wanted to get this post done before the week is out. With so much bad news out there, it's important to take notice of the good things, and I've got one here.

Deloitte compiles its annual Technology Fast 500 of high growth North American companies, and the 2008 list was just announced this week.

I haven't posted about this listing recently, but did post about their companion ranking - the Canadian Fast 50 - last year. I missed the Fast 50 this time around, and wanted to be sure I caught the 2008 Fast 500.

This listing covers many segments of the tech sector, and only a few are related to telecom or communications. 500 companies is a lot of ground to cover, and I can only comment on these sub-sectors, and within that, the companies that I follow or have some familiarity with. The only thing I'd like to say about the overall universe is that Canada accounted for 8% of the Fast 500 companies, which is probably about right.

With that said, all I'd like to do is draw attention to the companies I know something about. There's plenty else you can mine for yourself, and the detail is all there on their site.

First, waving the Canadian flag, I'd like to cite seven companies that made the list. I especially want to mention MyThumb Interactive, the highest rated Canadian company that I follow. Not only did they do very well here, but they made the Canadian Fast 50 last year. So, hats off to these companies, with three of them cracking the top 100:

MyThumb Interactive (#44), Sandvine (71), Impact Mobile (89), RIM (142), Vizible Corp. (171), Bridgewater Systems (423), and Redline Communications (462)

From the U.S., here are eight familiar companies you can feel good about:

GENBAND (63), Grandstream (109), BroadSoft (185), ShoreTel (215), Occam Networks (217), Cbeyond (406), Neustar (451), and Sonus Networks (493)

Some of you will have broader coverage than me, so if I missed any of note from this list, by all means, let me know. When it comes to recognizing growth stories, the more the better.

Technorati tags: Deloitte, Jon Arnold, Fast 500, Canada