Acme Packet, the iPhone 5, and the End of Telecom
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create semi-permanent paths to help smooth IP communications for things like multimedia; the technology can be of use both to service providers and to big enterprises that send a lot of data around the world. “We’re engaged in 25 to 30 different carrier discussions about what they’re going to do with LTE. You will see a number of them launch in 2013,” Ory says.
MeLampy, the company’s chief technology officer, adds that the world’s 5.9 billion mobile phones currently use different networks and radio equipment to handle voice and data. That’s expensive and inefficient. “Long term, LTE will prevail,” he says. “Carriers need to cost their costs. LTE is dramatically simpler and cheaper to run.”
Once the carriers switch to voice over LTE (from GSM, say) and unify their infrastructure for voice and data, MeLampy says, “That builds a giant network of session-oriented networking devices. We think that network of connectivity is going to be used for more and more. There’s no other option I can see as a technologist. I just hope I’m young enough to enjoy the fruits of it.”
He’s talking about the fact that in telecom, things move slowly. “When we started the business 12 years ago, we thought it would happen in the next three years,” MeLampy quips.
So, Acme Packet has been forced to expand its customer base beyond carriers and into enterprises, which made up only 3 percent of its bookings in 2008, but are now about a third of the company’s business, Ory says. Wireless carriers “are relatively few and tend to be very cyclic,” he says. “A business that is both selling to service providers and to enterprises, where there’s synergy between those two groups, is a much more sustainable business and a more valuable business.”
On the enterprise front, Acme Packet is looking to ride the wave of BYOD—bring your own device—in the workplace. “This is the last year people buy desk phones,” Ory says. “Phones come from wireless carriers,” and those carriers “are going to want to connect directly to the large enterprises.” Acme Packet’s role, then, is to provide security and session management for networked devices in big-company environments. (Its biggest competitor in enterprise is Cisco.)
In other words, the big idea Ory and MeLampy had 12 years ago could finally be coming to fruition, thanks to a trigger in the form of LTE and the iPhone 5.
But all of this raises some bigger issues. For one thing, Acme Packet’s founders have really been talking about the broader future of the Internet all along. As MeLampy explains, the Internet as it exists today runs on packets of data that are largely independent and go their own ways around the network before being reassembled at a destination address. But there are big questions around identity, security, and trust with this approach, especially with the addition of so many mobile, networked devices.
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