Profile: Stratus Telecommunications, the Magic behind the Jack

With all the hubbub surrounding MagicJack, it is easy to dismiss them as nothing more than a marketing machine.  But behind the infomercials lies a network – the CLEC network that often gets credit for the ability to offer such low pricing.  That network is built and largely operated by MagicJack’s sister company, Stratus Telecommunications.  MagicJack and Stratus are both owned by Ymax but are managed independently, and while Stratus supplies the infrastructure for its sibling, those same products are also sold to network operators across the sector.  Stratus’s offerings are based on the ENTICE product suite, software which melds together the various pieces that make up a modern VoIP network – the session controllers, gateways, etc, and turn them into a functioning whole.

Broadsoft is perhaps their most direct analog now that VocalTec has retreated and Sylantro was bought out by Broadsoft.  While some see the VoIP sector as yesterday’s fad, that is just at the consumer level – at the carrier level everyone uses it and it is not a discretionary expense.  Stratus is comparatively small, but it has been showing some strength internationally with wins at G-Tel, Marcatel, Danawa, and Smile.  The disruptive effect that MagicJack has been having here in the USA will likely bring increasing attention to the technology that powers it.

Recently, I had the opportunity to speak with Nathan Franzmeier, President of Stratus Telecommunications.  Mr. Franzmeier is no newcomer to this business, having led the same team out of Lucent in the development of what is now the ENTICE platform as CEO and founder of Emergent Network Solutions, then staying on as part of Stratus Technologies, and now as head of the same group Stratus Telecommunications.

TR: What products is Stratus seeing the best growth in right now?

NF: Stratus has been seeing growth in selling Residential/Enterprise VOIP along with Prepaid services and also in our Converged Application Server (doing LNP).

TR: Is demand healthier from providers focusing on business VoIP or the consumer VoIP?

NF: The consumer VOIP business is stronger but the business VOIP is growing faster.

TR: In addition to providing software, Stratus manages the network for MagicJack.  Do you think outsourcing of VoIP networks will become a trend, similar to the outsourcing of wireless networks that has begun lately?

NF: I believe all carriers are looking to reduce costs and so outsourcing will continue to be a trend when it reduces costs.

TR: How has the economic crisis affected Stratus’s sales pipeline?  Have there been any signs that carrier spending is returning toward normal levels?

NF: So far, it has shaken up our competitors who were dependent on VC funds and so has been good for those of us who aren’t.  The price points on commodity products like SBCs continues to fall.  I believe it will be a year before carrier spending returns to normal if you consider normal means higher.

TR: What is Stratus’s greatest challenge for 2009?

NF: The greatest challenge is figuring out how to sell more in the areas that are growing and how to take advantage of recent shakeups among our competition.  Specifically deregulating countries and expanding third world countries continue to be a focal point.  Meanwhile we continue to strive to provide excellent products and services in a lean environment which positions us for strong growth when the economy recovers.

TR: Thank you for talking with Telecom Ramblings

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Categories: Industry Spotlight · Telecom Equipment · VoIP