Dialogic Back After 7 Years

This Dialogic will be about IP not TDM

If you have been in the telecom business for five years or more you know the large shadow cast over the industry by Dialogic. In the mid-nineties the computer telephony/CTI market was booming and Dialogic was the largest player in the space. Their partner programs were legendary and their ecosystem of loyal partners like Parity Software, Alliance Systems, Apex Voice, Executone, Pronexus Systems, Prima and others was the largest in the industry.

Dialogic’s competitors launched ecosystems of their own and NMS, Rhetorex and Brooktrout all competed ferociously to be the biggest and best DSP resource board vendor. Popular applications at the time were international callback, IVR, ACD, application generators and virtual receptionists like Wildfire. What’s Wildfire you ask? Well absolutely the most amazing solution allowing you to have an interactive conversation with an automated attendant. You could say things like “Wildfire please call Greg Galitzine,” or “Wildfire please conference Greg Galitzine and Tom Keating.” This particular solution never became a commercial success and there are numerous theories as to why. Suffice it to say the nineties were the glory days of telecom where the power of computers was coming to communications allowing us to leverage commercial off the shelf systems to build robust telecom solutions that simply were not available before.

Furthermore this era marked a time when anyone with a good idea could go out and buy a board and start developing tomorrow’s killer communications application. You no longer needed to design with hardware, you could use software only. This was a breakthrough. This was new. This was different and this was a realm where Dialogic reigned. Now this is not meant to be disrespectful to other players in the field. Everyone did their part but no one spent like Dialogic to further the growth of their partners and the market.

Oh and I almost forgot Microsoft and Novell’s participation in the market. During the heady days of the nineties the two operating systems vendors vied for first place in computer/communications connectivity. With competing standards like TSAPI and TAPI the two companies fought incessantly to be the leader in CTI.

In the late nineties the industry changed dramatically for a few reasons. The first was the internet took off and Wall Street spoke incessantly about how far behind Microsoft was in this space. In addition Novell lost relevance as we progressed into the decade. So Microsoft took most of their telecom team and resources and devoted them to becoming leaders on the Internet while forgetting about telecom for the most part.

In addition around seven years ago Intel decided to purchase Dialogic with the goal being to integrate Dialogic technology on Intel processors and further entrenching Intel in the communications space.

Around this same time IP telephony began to take off and the industry started to transition into trying to figure out how best to leverage IP. After a few years of massive growth in VoIP, the market crashed and we had the telecom nuclear winter.

When Intel took on Dialogic, the company decided to spend more of its time selling its technology to current Intel partners. They became much less aggressive at bringing in new partners in the market to develop with Dialogic boards. They certainly were a major presence in the market but they were slower to move and had virtually unlimited resources. They lost some share but not as much as they could have. In all, the small Dialogic division fared well under its massive corporate parent.

The term “Dialogic” is an interesting one as it symbolized the market for a while. Dialogic and its partners were the computer telephony/CTI industry. They were the lion’s share of the market.

But even as the Dialogic brand became deemphasized and eventually received no promotion, people never forgot it. Even to this day.

If you haven’t been watching closely, the division that formerly was called Dialogic was recently sold to Eicon. As of this writing the transaction has been finalized and the good news is after seven years the Dialogic brand is back as Eicon will be changing its name. This could not be better news for the many Dialogic partners I have spoken with over the past months.

This is the first move Eicon has made since the transaction has been competed and based on this action the company has certainly gained strong momentum. I had a chance to speak with Jim Machi, Dialogic’s Vice President – Product Marketing yesterday and ask some questions about where the company is headed.

One of the first things we discussed is how Eicon’s Diva Server product line is now complemented by products from the Intel Media and Signaling business, including the broad range of Dialogic analog and T1/E1 network interface and voice cards, PBX integration and station interface cards, voice and video Host Media Processing software and HMP-enabled boards, SS7 and signaling solutions (including an SS7-based AMC card), gateway solutions, and ATCA -based multimedia server product line. There is obviously no shortage of products in the company’s portfolio and there are no immediate product cancellations.

In addition Dialogic will be part of the Intel Communications Alliance and will be on equal footing with other players in the market. There will soon be an Intel partner program and the company says the culture of Eicon integrates with theirs very well. Having a new partner program is great for Dialogic as over the past years they had to work within partner programs designed for chips.

Going forward the focus of the new company will be on IP-based and HMP-enabled solutions. The tremendous amount of experience they picked up with Intel chips will certainly serve them well over the years. Jim tells me customers are genuinely enthused about what is going on. They seem very happy.

I asked Jim if he feels the new Dialogic still has the power to move markets the way they did in the nineties. Jim was very frank and pointed out the TDM market is shrinking and you don’t need a DSP board to record a VoIP conversation. He went on to say that in three years they will know if they are still the same player as they were in the nineties.

One of the reasons they are so optimistic is that they feel their HMP and DSP solutions will have the best price/performance in the industry. Obviously Dialogic under Intel was more keen to develop HMP products as they pushed the sale of Intel chips. The new Dialogic can focus on selling DSP-based solutions when this makes the most sense.

The company sees more PCI Express products in its future and they plan on playing more in the video market which they feel is now a larger part of the communications space. The gateway market grows at 30% a year so expect to se them playing more in this space as well. According to Jim the industry still needs to do all the crunching for multimedia processing whether it is over the phone, on a new device or via Skype.

I asked what the biggest threats were to the company and they responded that the market is maturing and there aren’t as many ISVs. There is a consolidation of customer base and competitors. In addition much of their business was once an adjunct to a switch – voicemail, ACD, IVR — and now Cisco and Avaya are able to sell entire solutions.

Other areas of growth for the company are interoperability in the IP and SIP space. Telecommunications is still not plug and play according to Machi. The company also feels confident that open systems are going to win in the IP world. I queried them on open systems and they explained that using Dialogic building blocks solutions providers such as SBC (session border control) companies are able to spend less money on R&D and more money on differentiating themselves. Finally you can expect to see Intel play more in the IMS and 3G video space.

In short the company seems to have a very aggressive business plan for growth. The question everyone is asking is will the new Dialogic be able to pick up where the old company left off? If so what products will be their major money makers. Where will they add value and do they have the clout to move markets the way they used to. Many of the same people who were with the company a decade ago are still there and they seem more ready for this challenge than you can imagine. There is tremendous enthusiasm in the new Dialogic and their drive to lead in areas such as gateways and IP is commendable. So the company is ready… We will have to see how they execute over the years. If they are successful I can see the entire communications market benefiting – friends, foes and partners.

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