Enghouse Acquisition: The Rise and Fall of Dialogic

Dialogic is perhaps most responsible for bringing the once disparate worlds of IT and telecom together.

The company’s enabling tech which first consisted of hardware boards allowed PCs to be used as the basis for telecom systems. This was a sea-change in the market and in the eighties and nineties, a tech revolution referred to as CTI or computer telephony ensued, thanks to “open-systems” coming to telecom.

Perhaps the best example of how this worked was in the voicemail space… Instead of a proprietary solution, companies used DSP resource boards from Dialogic and other companies to construct lower-cost voicemail solutions.

In time, it became apparent these boards could be used to convert voice into packets and then back again. Thus the advent of the IP telephony/Internet telephony/VoIP market.

In 1999, Intel bought Dialogic – they saw the valuable intellectual property as essential in improving Intel processors.

As CPUs became more powerful, the market eventually shifted – to software. Host media processing or HMP replaced boards. The thing is – the boards were very expensive and had high margins. Software helped usher in a race to the bottom.

Intel really had no idea how to run the company – they strangled its ability to compete effectively in the market with competitors like AudioCodes.

In 2006, Eicon Networks purchased Dialogic from Intel and took the Dialogic name as their own.

Nick Jensen architected the deal as President and CEO.

He had a strong vision for the company. He would roll up the market and then focus on video.

in 2008, the company purchased once-fierce competitors NMS, Cantata and others.

In 2010 they purchased Veraz for video compression and SBC technology.

In 2012 we had an in-depth interview with new CEO Tim Cook where we discussed the opportunities and challenges ahead for the company.

In 2014 we detailed the company’s leadership position in WebRTC. In 2015 we discussed the company’s transition to software.

In 2018, the company sold some assets to Sangoma and now the rest of the company – UC and SBC technology, goes to Enghouse.

So what happened?

Video took off but not in a way which was easy to monetize for the company. Much of the company’s growth hinged on the need to use the company’s solutions at scale. Had carriers become the winners in video, the vision Jensen espoused would have worked well. Unfortunately, apps and streaming providers became the video leaders and they didn’t have to have Dialogic tech to provide solutions.

In addition, Asterisk became a competitor and even when Dialogic countered with its own Asterisk solution, Sangoma had won the war already with reasonable pricing and high-quality solutions.

In the end, Twilio kicked the rear of the market.

They turned telecom into APIs. They upped the abstraction game and used the cloud to solve problems that once required boards, software and data centers.

Twilio did to Dialogic what Dialogic did to proprietary telecom solutions. They allowed a new type of developer to provide telecom solutions without needing to be intimate with the details of telecom.

Dialogic lasted many decades as a disruptive force in telecom and tech. They helped usher in the IP communications and UC solutions we all use today. The world is certainly better off as a result of their existence.

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