Well, now that Sylantro’s acquisition by Broadsoft is out and public, it’s time for the analysis.  I recently penned a piece for Fierce VoIP about why Broadsoft won and Sylantro lost.  There’s another aspect of this: what does this mean for the future of telephony application development?  Om Malik identifies two major competitors : Sonus and MetaSwitch. True?  I think the answer to that is pretty complicated, but let’s get to the meat…

For quite a while, the telephony ecosystem for carriers has seen a sharp divide between operators and vendors.  Operators rely on the vendors for major service functionality, and vendors cook up ideas for the carriers that might represent future revenues.   It was very rare to see operators also provide equipment, and vice versa.   One major reason for this was that the vendors didn’t have operational experience and marketing skills to enter the service world, and since an operator couldn’t expense R&D over many organizations, it could never keep up with competition from other vendors. This put us in a strange place, where operators would provide a service (let’s say ringback tones) based on vendor’s equipment that was easily accessible to other operators.  Once a success was clear, all the competitors would simply purchase the same equipment and deploy it, gutting the market for the service. Indeed, the involved vendors had the same issues, where a clear service success was copied by other vendors.  Bad stuff for everyone.

As the next generation vendor market consolodates under Broadsoft, does this put us into a situation where no other competitive vendor can rise up and stop them? I’m not so sure it does.  First, I believe that Broadsoft has competition outside of Sonus and Metaswitch, but even that idea needs refinement.  My best guess is that most of the  ports that Broadsoft has deployed are not used to their full capacity in terms of functionality.  More likely, they are being used to provide line replacement functionality for existing services.  Thus, from a practical perspective, their competition probably includes Huawei, Al-Lu, etc. 

If you consider the advanced functionality that Broadsoft’s  platform can provide, then you might get an entirely different set of competition, but not from vendors. My gut reaction to name these guys includes big players like BT/Ribbit and Orange, or upstarts like IfByPhone, Jaduka and Voxeo.  The basic Broadsoft value proposition is that they enable carriers to provide the same sorts of APIs as BT and Orange, yet for service providers I can name, none of them use a standard vendor approach.  (Although not the focus of this piece, as a software developer, I appreciate and value the ability to write one application on top of the Broadsoft API, then offer it to all of their customers.  It’s powerful.)

But here’s the point behind the observation: it looks like the newer service providers DON’T use standard offerings from vendors to provide these functionalities.  They might, but they haven’t yet. Is this yet another consequence of the softwareification (it’s a word) of our industry?  Maybe we had vendors because they did difficult things that the operators couldn’t do.  If it’s not hard, maybe vendors take a back seat.  I’m personally looking forward to the vendor version of the “dump pipe” label. (Dumb box?)  Here’s the juice that might push it over the top: Broadsoft and the other vendors work hard at making it possible to “do” stuff.  In the upcoming web world, “doing” is easy and not very valuable, but “knowing” is all powerful and very valuable. 

In 2009, what am I looking for?

• Vendors continue consolidation, and some smart guys start thinking about making vendor offerings better at “knowing”
• Sonus freaks out, and acquires somebody somewhere to block the growing threat from Broadsoft
• Operators push forward on application interface opportunities, with or without vendor involvement.
• In the long term, maybe the vendors lose their place as the source of smarts, and it returns to the operators