FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet

Pete Wylie — Mon, 25 Aug 2008 16:40:47 -0400

FierceVoIP: Acme Packet recently released its second quarter financials, and you were quoted as saying they were disappointing, but that you weren't overly concerned with revenue not meeting initial projections. Are you still optimistic about Acme Packet's growth?

Ory: Absolutely, we believe we have the best product, coupled with the thought leadership, experience and security to provide the best service possible for our clients.

We had some sales get pushed back into the third quarter, which contributed to the adjusted revenue projection. And overall, just the way we primarily go after Tier 1 companies, their adaptation rates are a little slower, but the purchases are usually much bigger, which can lead the market to be rather lumpy.

FierceVoIP: Company literature states that Acme Packet works with 29 of the top 30 Tier 1 companies. Do you see any competitor's entering into that space in the near future?

Ory: I just don't see another company matching the product first of all. I sincerely believe Acme Packet has the best session border control product on the market; in addition, I think we have by far the highest penetration and a great relationship with our customer base. We offer more connection with more markets than any of our competitors, and that really goes back to our inception eight years ago.

FierceVoIP: How so?

Ory: Well, while other players in our market were going after the smaller carriers, the more entrepreneurial ones, we were focusing on the Tier 1 companies. And over time it became apparent that the larger carriers had the customer base and the infrastructure that required a lot of session border control servers.

FierceVoIP: What level of adoption of the Net-Net 9000 client have you seen so far?

Ory: We are definitely seeing the Top 10 beginning to purchase it more. The 4000 model is still the workhorse and it gets deployed more often, but some of the bigger companies are really seeing the advantage of the 9000 because the larger telcos are used to big iron and gateway, and it has really useful features, like in-box redundancy and better signaling and media capacity. The 9000 is certainly better-suited for anyone with DSP requirements.

FierceVoIP: Recently, you said Acme Packet does about 40 percent of its business in the U.S. and 60 percent internationally, do you see those percentages staying pretty much the same going forward, or do you see a shift toward either market?

Ory: Well, I'd say it's closer to a 50-50 split between the two now. When big deals go through it can skew the numbers one way or another, but I say its pretty close to half-domestic, half-international. APAC and CALA are doing well, as the cost of doing business in these regions trends down, the value proposition, in places like Mexico and Brazil, is really expanding.

FierceVoIP: Where do you see the VoIP industry going in the next 5 to 10 years?

Ory: I think in 10 years, maybe even 5 years, the bulk, if not all, of our communications are going to be IP. Whether you're in your home, car or office, it's all going to be digitized and sent by packet over IP. The problem then enters in, "How can I trust this line?"

For example, if I wanted to make a call to a bank to make a big transaction for my business, I'm not going to use Skype, it's just not secure enough for that type of call. So customers really have to form trust and find quality in the type of IP they use for each type of communication. I think what you will have is companies and carriers building out closed, privately managed signal networks, and there is going to be a lot of need for session border control in that environment. So in short, I think we see a Layer 5 session-oriented build out in the next five years.

FierceVoIP: There is quite an opportunity there, any specific areas you see as first adopters?

Ory: I think the enterprise and call center markets are really ripe for growth. They want to move to IP to lower cost and improve disaster recovery. I think they will turn to trusted carriers for the reliability and security, back to the trust issue, and we will be primed to offer the session border control so these communications can be both cost-effective and secure.

AcmePacket

FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet