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Summary:

Voice over IP software/softswitch company, Syndeo Corp., is said to be out of business. The news comes from prety reliable sources, though I have not been able to confirm the news with the company. I sent an email to the company PR lady, but it bounced […]

Voice over IP software/softswitch company, Syndeo Corp., is said to be out of business. The news comes from prety reliable sources, though I have not been able to confirm the news with the company. I sent an email to the company PR lady, but it bounced back. The company had raised a total of $98 million in venture capital funding from the likes of Redpoint Ventures, Comcast Interactive Capital, large cable operators, and others like Sumitomo, Sun Microsystems, Meritech Capital, Intel Capital, Scientific Atlanta.

Ironically, the company’s strongest backers, i.e. the cable companies ended up shunning the company’s products and instead opted for offerings from Motorola, Nortel and Lucent Technologies, amongst others. Comcast ran a few trials with the company but it never really translated into serious dollars for the start-up which at one time was seen as the shining stars in the packet telephony business.

Syndeo was one of the major boosters of a class 5 softswitch technology, which was very much in fashion with investors five years ago. The company was started in 1999, right at the peak of technology/telecom bubble.

Since then the business has gone through some serious retrenchment and only a handful survive. Among the leading players are Nortel Networks, Sonus Networks, Motorola, Teklelec, Lucent Technologies and Veraz Networks, which had a roller coaster ride as well. According to Synergy Research, the top four vendors for soft switches in third quarter of 2004 were Nortel, Sonus, Motorola and Teklelec. Syndeo shut down is symptomatic of the malaise that surrounds VoIP: despite all the hype, the actual deployments in live networks are still far and few.

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  1. I agree w/ the last bit – the numbers/deployments do not match the hype around VoIP. During the dot com boom, we used to hear some measures (traffic, subscribers, eyeballs) that, while not indicative of revenue, at least signalled an uptake among the massess. For VoIP, however, service providers’ claims about VoIPs popularity aired without any supporting data on subscriber bases.

  2. Victim of the Stupid Network — don’t need no application switches, folks. No need to recreate circuit telephony on IP, no matter how cosy and familiar it seems.

  3. Jonathan Richards Wednesday, December 22, 2004

    I suspect for invetors in the so called “soft-switch” market, this is the tip of the iceburg. I agree — this is the “Rise of the Stupid Network” at play – kudos to the earlier poster and to Dave Isenberg.

    The Syndeo meltdown is most likely from the impact just starting to occur from OpenSource solutions such as SER (SIP Express Router), Asterisk (A full-fleded soft-switch when coupled with openSS7), YATE, Vocal/Vovida.org as well as SIPFoundry.org – means that *anyone* in the soft-switch biz will have a short-term life.
    OpenSource VoIP Servers are now robust, secure, reliable and thanks to SIP interop with anything with ease. Opensource impact on voip will really hit in 2005.

    Vendors such as Cisco, NortelNetworks, Lucent, VocalData, Broadsoft, Mitel, and Sylantro Tekelec should take a lesson from history of the the unix web server daemon, httpd which serves up html pages.

    Remember when the Netscape
    Publishing server was a $250,000.00 product? As were similar systems from Silicon Graphics, Apple, SUN and Microsoft?

    Apache, the opensource web server coupled with opensource database servers such as Tomcat and Postgress or MySQL obliterated that market – with the exception of the MSIS or Microsoft Internet Server system which is chock full of security holes and is *given* away for free in its bundling with the OS.

    Opensource web servers and VoIP servers runningn software such as GnuH323Gatekeeper, OpenH323, SER or Columbia.edu SIPd of course run on a multitude of OS’s – from the many distrobutions of Linux (about 30) to NetBSD, the highly secure OpenBSD, FreeBSD MacOsX or Solaris – on almost any hardware platform – SUN, Apple, Dell, AMD or Intel PC’s – anything from a Pentium II to 64Bit 3ghz AMD – scalable, clusterable and robust – just like the venerable Internet DNS system.

    IMHO everyone and anyone who can install Linux, run `$make ; make install’ will be able to run their own softswitch with SIP, MGCP, H323,(and now even SCCP or H248) voice-mail, ANI, SS7, TDM-to-IP or ethernet trunking – the whole nine yards; and that’s today not tomorrow.

    How many remember back to the famous comment from Thomas Watson at IBM in the late 1940’s when he said that there might be a world wide market for perhaps 6-12 digital computers? We always overestimate the impact of a technology in the short-term but *underestimate* it in the long term.

    Q:
    How big is the market for “soft-switches”? –common analyst wisdom is that with ILEC and mobile Service provider consolidation globally, the market is getting pretty small.

    Well, I run Asterisk 1.02 on Linux on my HP Ommnibook 6000 laptop – why? I link my sip calls from Pulvers FWD (sip:33722@fwd.pulver.com) to my Xten SIP phone on my PDA, or to my mobile – I control the voip network and inject calls into the PSTN under my own routing rules…

    Competition and winning business models will have to evolve based on original ideas and services – things you can *build with the tools* – not just moving the data and making a phone ring.

    The future for voice telephony is going to get *fun*…

    -JR
    btw, Sorry for long post… just felt this needed to be said.
    Seasons greetings!

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