Real Time Communications Featured Article

CEO Walsh Outlines GENBAND's Winning Formula

June 11, 2014

Sometimes new ideas take a while to go from concept to reality, but when things start moving in tech, they tend to happen fast, so you need to be ready to strike when the iron is hot. That’s why GENBAND has been aggressive in positioning itself – and its service provider customers – for the future.

Key tenets of that strategy include the cloud, fast and flexible service innovation, mobility, network functions virtualization, real-time communications, software-defined networking, and WebRTC.

That was the message from GENBAND President and CEO David Walsh, who gave the opening keynote at GENBAND Perspectives14 in Orlando this week, where 700 people from 30 countries have gathered.

Great companies grow revenue, make profits, and invest in their businesses, said Walsh.

“It’s really your R&D that keeps you competitive in the marketplace,” he said.

Indeed. GENBAND has been on the leading edge of network transformation, and the move to help service providers both monetize their networks and deliver over-the-top services on those networks, by investing in the above-named technologies.

That investment has been both in the form of R&D and of acquisitions. As discussed in the INTERNET TELEPHONY magazine’s April cover story, GENBAND has been a pioneer in the WebRTC space, and also has made some interesting acquisitions recently in the unified communications and real-time communications space.

In April 2013, the company introduced a WebRTC gateway called SpiDR that sits at the edge of the network and provides open APIs that application developers can use to leverage the rich communications services of the telecommunications network – including voice, video, presence, shared address book, call history, instant messaging, and collaboration. Earlier this year GENBAND introduced SMART OFFICE 2.0, a WebRTC-enabled unified communications platform that delivers voice, video conferencing, chat, presence and collaboration via a browser.

In February, GENBAND revealed plans to acquire uReach Technologies, a privately-owned company that provides a variety of unified communications solutions to service providers of all stripes.

And in September, GENBAND announced the acquisition of fring. The acquisition of fring was a move to GENBAND to enable its carrier customers to get into the OTT game immediately with a new real-time communications solution. Fring was one of the earliest apps on the iPhone, and it supports VoIP. At the time the deal was announced, there were 40 million fring users.

Applications are where it’s at, noted Walsh, who pointed out other examples in this realm such as an online dating app called tinder, transportation app Uber, restaurant app OpenTable, and lodging app Airbnb.

“These are the ways that people are now spending their time, and this is entirely different than even 10 years ago,” said Walsh, who went on to point out that the valuations of many of these app companies now dwarf those of their traditional peers.

For example, WhatsApp was valued at $19 billion at the time of its acquisition by Facebook in February, while VoIP pioneer Vonage is worth about $800 million; and Uber is worth $17 billion, while Avis is worth $6 billion and Hertz is valued at $12 billion. With a valuation of $10 billion, Airbnb is worth much more than the $6 billion InterContinental Hotels Group. Instagram, at a valuation of $2 billion, is worth nearly twice that of Kodak. And online music service Spotify, valued at $4.3 billion, comes out at $1 billion more than Warner Music Group, the company that signed The Beatles.

“Real-time communications is getting embedded in everything, everything we do,” Walsh told the Perspectives14 audience, made up mostly of service providers like the telcos. “So we have to find a way to capitalize on that growth, because that’s where it’s all coming together.”

As service providers seek partners to help with their network transformations, they are looking for companies with strong financial foundations, said Walsh. To be successful, he added, it’s also important to be environmentally friendly, and socially responsible. GENBAND, he said, meets all three criteria.

GENBAND doesn’t carry any debt, has plenty of cash on hand, and already has made an array of investments over the last 8 years, said Walsh, adding that The Wall Street Journal recently named GENBAND as the No. 1 venture-backed company.

The company is also helping address the fact that data centers are energy hogs by transitioning carriers to new networks that use less energy, and are distributed so don’t have to be overbuilt. Moving away from the PSTN and leveraging newer, more efficient infrastructure could reduce energy and water usage costs by 70 percent, real estate costs by 85 percent, and CO2 emissions by 40 percent, according to GENBAND.

“Every time someone downloads something on this,” said Walsh, referring to his smartphone, “all they’re doing is burning coal.”

At the same time its carrier customers are transforming their businesses, GENBAND is doing the same thing, not only by investing in new technologies, but also by moving to be what it calls a level 2/complex offer/custom product provider, to a company that helps carriers optimize their networks and ultimately delivers outcome-based solutions that allow carriers to launch and alter services as demand requires.

Undergoing these fundamental changes is no smart feat for GENBAND and its customers, which is why most companies will not make the transition, especially the public ones, said Walsh, adding that GENBAND started out on this path a couple years ago. That’s because companies run into what Walsh calls the fish problem. The shape you get when you graph investment (low to high to low again) against profit (high to low to high again) to get to the new level 4 operating model is a fish, he explained.

The bottom line is that success in this fast-changing market takes innovation, hard work, business acumen, and a willingness to put yourself out there and take a risk. But sitting on the bench is a bigger risk still.

“Business is the sports for adults,” said Walsh. “And in sports you have to win. In business you want to win.

“This is competition, and we’re all in a race,” he said. “We’re all in a race to the top.”

Edited by Maurice Nagle

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