Internet Protocol network gear provider Genband Inc. is getting into the applications game, closing on a deal to acquire BayPackets Inc. for an undisclosed price.
Fremont, Calif.-based BayPackets has built up a portfolio of Internet Protocol multimedia and messaging applications ranging from video mail to fixed mobile convergence software that can transfer messages between wireless and wireline networks. BayPackets' voice-over-IP messaging technology also supports Internet Protocol Multimedia Subsystem, a technology that allows operators to mix applications and flow them between wired and wireless networks more easily.
With that, Genband — known as General Bandwidth Inc. before it shortened its name earlier this year — now moves from providing just the switching and transport services for broadband networks to include the applications that ride on those systems.
“It really doesn't change our direction — it just raises us to the next plateau,” said Jody Bennett, Genband's vice president of marketing.
It's the second major acquisition in a year for Genband, which snapped up softswitch supplier Syndeo Corp. in March. That added control and softswitch products to Genband's original product line of Internet Protocol media gateways and signaling systems that help route IP traffic as it flows through an operator's network.
Genband hopes BayPackets will strengthen its play in the cable market by adding messaging and video telephony applications operators want, Bennett said. Genband already has contracts to supply switching and voice-over-IP systems to Canadian cable operator Vidéotron, reaching more than 200,000 subscribers, and has deals with RCN Corp. and Blue Ridge Communications.
“We've got some good activity with the larger [cable companies] in the U.S. and hopefully we can point to some specific deployments here soon,” Bennett added. “We're making a lot of progress, and this only strengthens our value in the cable sector.”
Also coming along with the acquisition is a new list of technology partners including Lucent and IBM Corp. BayPackets also has customers including telcos AT&T Inc., Deutsche Telekom and SureWest Communications.
“This is probably a big reason that we pursued the products, because it's field-proven to millions of subscribers,” Bennett said.
Adding BayPackets' 90 employees will almost double the size of Plano, Texas-based Genband. The deal closed Aug. 25, and Genband has already started integrating BayPackets' operations with its own.
Personnel wise, BayPackets CEO Ken Epps and chief financial officer Joseph Powers will be leaving, but its cofounder, Sanjeev Chawla, will join Genband as its new chief technology officer. BayPackets' other cofounder, Anurag Goel, will also take a sales position with Genband.
Otherwise, BayPackets' engineering and research and development groups — including about 60 engineers based in India — also are moving over to Genband. The India facility also has space for new offices, and Genband will take advantage of that to expand its operations, Bennett said.
Genband's move to add VoIP applications services is a valid attempt to expand in a growing and competitive market, according to Stéphane Téral, principal analyst for voice-over-IP, IMS and fixed-mobile convergence markets for Infonetics Research.
“I think the voice application service piece to grow the company is one thing, but you also have to look at the synergies that you can achieve by bringing the two companies together,” he noted. “And that is looking good as well — there are many synergies.”
And while consolidation sometimes is a sign of an industry in trouble, in this case it indicates that the VoIP equipment market is a healthy one, Téral said. In growing markets that sprout many competitors, consolidation is necessary to keep the market healthy because it gives the acquiring companies a more complete product line, and “you remove the redundancies and you gain cost efficiencies,” Téral said. “So it is needed.”
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