Interview with Micah Singer, CEO, VoIP Logic

Interview with Micah Singer, CEO, VoIP Logic

By JR | April 8, 2008

You let service providers outsource some of their VoIP infrastructure. How many service providers use such services and what kind of growth are you experiencing?

We now work with 150 service providers. Our average revenue growth is in the region of 50% (48% CAGR from 2003 to 2007).

What is a typical profile of the service providers you serve?

About 5 to 10% are Voice 2.0 companies. Another 30 to 40% are traditional VoIP providers. The remaining are wholesalers.

With an outsourced model we typically see service providers initially use the service but as they move up the knowledge curve and the subscriber base gets bigger, they tend to have preference for deploying their own infrastructure. What kind of implications does that market behaviour have on your model going forward?

That is exactly what has happened to some of the white label hosted PBX service providers in fact. Sometimes your customers might counter problems that are platform related and therefore not under your control. As a provider of managed system we asked ourselves where the leverage was. And the leverage is really in our OSS/BSS.

How many customers of yours use your outsourced OSS/BSS?

We have 8 such customers now.

How far has your OSS/BSS driven your customer acquisitions?

A couple of years back, 90% of our customers were wholesale and just 10% of them outsourced services like SBC and Class 5 switching to us. That 10% has gone up to around 50% now since we launched the outsourced OSS/BSS as part of our overall service.

What is the state of VoIP industry? Are any of your customers going for consumer VoIP right now?

No. From a startup perspective, the consumer VoIP industry became harder to justify as an investment around 2005. The new offers that we see are more hosted PBX type.

What is the latest in enterprise VoIP? How far has mobility progressed?

With enterprises there is conversation around integration with IT like Exchange Server and those kinds of bundles. Mobility is not the priority yet.

Your service provider customers will have end users with varied usage of VoIP and CPE in their enterprise networks. Does that have any bearing on the type of capabilities you bring in as an outsourced provider?

We use Acme Packet and that lets us support a long list of CPE. Sylantro and Acme do some interop in between the two of them and give us an approved list of CPEs. We also work on our own on some of the CPEs.

Which CPE gives you the least trouble?

Polycom and Cisco work the best … so far.

There is a growing breed of service providers that target SOHO and micro enterprises. Are you targeting these service providers at all?

Of course we target them. For what we do and the way we price it, we look appropriate for large resellers and smaller service providers like the ones you mentioned. ROI is number 1 reason they look for us. However I have to say that our problem is finding them at the point of need, when are they out looking. We don’t have a huge brand in the market.

I have spoken to some of them recently and they seem to have a narrower set of requirements for which existing Class 5 feature servers perhaps are not appropriate. And they tend to have proprietary in-house solutions. How would you judge your prospects in that segment therefore?

Even the service provider customers that no longer use us for Class 5 managed services and buy their own Class 5 system, continue to give us profitable revenue on Cortex (OSS/BSS platform). More and more customers are coming to us for integration of their existing systems and not necessarily the full managed service.

Have you had any venture capital?

Yes, we have had venture funding of $2.3 million so far.

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