Whatever happened to the 165 softswitch suppliers?

Almost four years ago, when we attended the SuperComm telecommunications trade show, it seemed like every other booth was touting their softswitch. By our count, at least 165 suppliers were then offering or promising to offer a softswitch.

Although by today’s more precise definition about half of the softswitch products were actually media gateways, the number of softswitch vendors has declined to a handful of successful companies. And, like most emerging industries, two or three players have captured the lion’s share of softswitch sales and another half-dozen have consumed their part of a minority share.

The Softswitch Consortium has morphed into the International Packet Communications Consortium, offering a forum for service providers, softswitch vendors, and media gateways suppliers to work together. So are the golden days over for softswitch suppliers? We don’t believe so.

While the major North American service providers have pretty much decided on their softswitch infrastructure for toll/tandem replacement suppliers, the rest of the world (ROW) still is largely “unassigned” when it comes to tandem replacements. Jim Lane, vice president of marketing at Telica (one of the consolidation’s surviving suppliers), believes there is still an opportunity for ROW toll/tandem replacement sales in the “billions of dollars.” 

Most softswitch industry participants and analysts also believe that the opportunity to displace Class 5 switches over the next decade is largely untapped, and that this also represents a likely multibillion-dollar shift in the service provider infrastructure.

For now, while the Class 5 replacement market is still in very early days, the media gateway suppliers are making a tidy business of providing the enterprise with hosted IP-PBX, IP Centrex, and offering some Class 5 switch features. In North America, many of these media gateways are connected directly to a carrier’s softswitch, creating a handy placeholder to offer IP-based services – waiting until the TDM Class 5 is replaced with an all-IP carrier infrastructure.