Comdial and PBX/CTI History

Today is a pretty historic day for me as one of the first companies I ever visited in the CTI space was a company called Comdial. Back in 1996 this was one of the leading PBX companies in terms of technology, general momentum and marketing. If you thought of advanced PBX companies, Comdial was at the top of your list. Inter-Tel was another company that came to mind at the time and there was quite a rivalry between the two organizations.

When I visited Comdial headquarters in 1996, I was impressed as it was the largest company headquarters I believe I have ever seen. Thanks to Greg McQuay a former Comdial employee for reminding me that the building was over a million square feet in size! When you took a tour of the facility you were blown away as you saw R&D, manufacturing and assembly all being done under one roof. The plant that Comdial had was so large in fact that they leased their plastic making machines normally used to make telephones to toy manufacturers whenever they were idle. You might argue the facility was too big but at the rate Comdial was growing at the time it seemed likely they needed all the space they had and more.

In 1997, Inter-Tel some may argue, started to win the race in technology through their launching of the Vocal’Net VoIP gateway and a VoIP network – one of the first in the world called Inter-Tel was one of a handful of companies that took part in a huge run-up in VoIP stock prices in what I deem the first VoIP bubble of 1997. Comdial no doubt noticed this and decided to jump into the VoIP game. They purchased a company called Array Telecom. Here is what I had to say about Array Telecom and Comdial back in 2000:

Years ago, when this magazine (Internet Telephony) was in its infancy, I met Stuart Berkowitz, the founder of Array Telecom. Array Telecom developed and sold Internet telephony gateways. What set them apart from the early gateway players was their unique minute-bartering system that allowed people in charge of individual gateways to barter minutes on their gateways for minutes on other gateways around the world. Berkowitz later sold his company to Comdial and has more recently set his sites on what he calls the "next big thing" in communications.

Berkowitz’ newest project is VoiceGenie a company devoted to supplying building blocks to service providers looking to offer voice portals to their customers. Berkowitz feels that voice is the best interface going. He maintains that of all the inexpensive self service technologies such as WAP, IVR, and others, voice is the easiest to use and better yet, there are 2.2 billion phones out there versus only 400 million PCs. Voice portals offer the ability to talk with Web portals such as MyYahoo!, where you have preprogrammed your preferences such as sports teams, stocks to watch, and other information. According to Berkowitz, voice portals are the ultimate fat and sticky application in a world that considers fat and sticky apps to be the holy grail of the service provider market. In fact, he believes Webtone will soon replace traditional dial tone. He has a point: Voice dialing cell phones already have similar functionality and have proven truly useful.

I queried Comdial a few times about what they were doing with Array Telecom and I never really got an accurate answer. The company changed management at this time and I lost track of most of my contacts.

Comdial literally fell off the map starting around 2000. No marketing. Little PR and little of anything was coming out of their headquarters which eventually changed to Florida where their subsidiary Key Voice was. The acquisition of Key Voice was pretty smart as it was doing well selling voicemail systems and allowed Comdial to have life-sustaining revenue during this tough time.

Comdial emerged from their slumber around 2003 or so for a few months. We heard from them at our Internet Telephony Expos and they seemed to once again have PR. There was a new management team in place and it seemed like they were up to some good things. Then they went dark once again.

It is for this reason I am not really surprised by the purchase of Comdial by Vertical. Bill Tauscher is certainly a visionary in telecom and he is doing a good job of aggregating the smaller PBX companies into a larger and larger company. As you may recall, Vertical Networks was purchased by Artisoft and the name of the company was then changed to Vertical.

I could go off on tangents for a while on my experiences in the market at this time as amazingly while Comdial was a leader in the CTI PBX market Artisoft back in 1996-1998 was an undisputed leader in the CTI appgen market or for those of you that weren’t there to appreciate it, the application generator market. Artisoft made tools that allowed you to build just about any telecom application you wanted. You could build a web callback button or a complicated IVR application with this software. Artisoft later decided to become a PBX company. They allied themselves with Alliance Systems (yet another article will likely be devoted to Jon Shapiro and Alliance Systems in the future) and did a bang up job of selling these industrial grade PBXs.

Getting back to Comdial. It is as if the CTI players have come full circle. The leading appgen company purchases the leading PBX company. It is sad what happened to Comdial. The people I knew in the late nineties who ran the company left right around the time Comdial went downhill. I think some of the reason for the company’s woes were that the new management didn’t understand how to take the reigns of this growing organization in a changing market. Whatever it was that sunk the company, it is one less brand in a fairly crowded PBX market. I wish Vertical much success with this acquisition and I am sure Comdial’s existing customers are now in very good hands.

  • tom cross
    September 6, 2005 at 4:23 pm

    Sorry to hear about Comdial but I know a number of dealers on the “front firing line” who have stopped selling VoIP because they have had to “buy the systems” back from customers. Why, VoIP is still a “let the buyer beware” product. I certainly expect to hear back from vendors that their products really do work. Don’t shoot the messenger but many products just don’t work on many old data networks. Until the VoIP vendors perform real network assessments to convince customers to really upgrade their networks before they install VoIP, expect to have a lot more “boomerang” sales. As Hunter Thompson once said, “when the going gets though, the wierd turn pro.” Its time for this industry to turn pro!
    Regards, Tom Cross

  • VoIP Blog - VoIP News, Gadgets
    September 6, 2005 at 4:32 pm

    Why TMC is the best news source for VoIP and call center news

    I was reading Rich Tehrani’s blog and came across some interesting insights on Comdial, its recent purchase by Vertical, and some historical perspectives put forth by Rich that really got me thinking about the history of telephony and how TMC…

  • Brian Villanueva
    September 12, 2005 at 10:48 pm

    I am a former employee at Comdial and I too remember when they were a major player in the CTI space. It was an exciting time to work for Comdial back in those days. Since January 2000 Comdial has been in a downward spiral. Their dedicated dealer channel has kept Comdial resilient and in business.
    I wish all my former colleagues best of luck and I hope Vertical turns this company around.
    Brian Villanueva
    Systems Engineer
    Cisco Systems, Inc.
    [email protected]

  • Rich Tehrani
    September 25, 2005 at 9:15 pm

    I received this e-mail today. The person requested their name be withheld.
    It is indeed sad to see the spiral of Comdial, I was responsible for the build up the software team and technology in the 90’s (BTW – know Greg McQuay well), to answer your “question” on Array Telecom….nothing was every used from them. The technology was very strong until “things changed” in 2000/2001. Here is a story that should be captured by some Ivy league business school and how to ruin an extremely good and very innovative company literally overnight.

  • Marcelo S. Penteado
    November 15, 2006 at 5:41 pm

    I work in a company whose it was the Comdial exclusive dealer in Brazil from 1994 to 2000. We sold and deployed Comdial products for many companies over here competing against Nortel, Siemens, Ericsson, Alcatel and Avaya and absolutely we had a competitive technical and best-price product. It was sad to see Comdial goes down and many people do not remember this name.
    About the text, I believe that the reason of this unsucess Comdial history was based upon they did not invested to spread their brand recognition, neither to become a global company, strong enough to be requested by other customers.
    VoIP is becoming a reality in Brazil too, being driven for Avaya and Cisco. VoIP IVR is starting to be discussed as usual or not…

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