Hi all, I'm new on this thread, and have some observations / questions on FTEL's strategy.
I've bought in to the stock, as I believe having a solution that really works does have real value. The short-term issues of getting sales in are clearly key, but I'd like to challenge a bit some aspects of the strategy going forward.
Essentially, it seems to me like it will be hard for FTEL to be effective in pursuing an equipment strategy and a telecoms strategy at the same time. You can't sell equipment to carriers and compete with them at the same time. (Viz AT&T / Lucent).
It sounded from some things I've read that for this reason they're pursuing the non-carrier equipment market (Fortune 500 etc). But it makes no sense to me to not pursue carriers in building an equipment business. The Tempest product does not seem to be 'carrier-class', but if they're using it to build the FNet network, they can't be too far off. Carriers may well come to them if they really have an advantage on the equipment (see the press release on the China carrier), but 3Com and the other big guys will be getting into this business as well in a serious way (see 3Com / US GlobalLink deal article).
Besides as far as the telecoms side goes, building a business based on proprietary equipment seems to me like a losing approach. Companies can't in practice focus on engineering basic technology and delivering superior customer service at the same time. You don't agree ? Just tell me an example !
A secondary issue is that of interoperability. There clearly will be different technologies that carriers use for building their separate networks. High interoperability will mean that networks can provide national, and indeed global coverage much more rapidly. The strategy that ITXC seems to be pursuing, ie providing settlement services and enforcing quality standards seems to me like a winner in the medium term (and that's not very long in this business). FTEL has a vision statement on its website which seems very focused on using 'proprietary' technologies. Though owning some proprietary things is good, many businesses in the internet world show that a high degree of openness is needed to succeed. I have heard nothing about FTEL thinking about licensing its codecs to try and establish a standard. I have a hard time believing that this market won't move to a more open standard sooner or later.
Although I just bought this stock, I'm kind of worrying myself with this train of thought.
Anyone have some counter arguments to reassure me ? I may try faxing this post to Helen West, and then getting her on the phone. Will post if I hear anything useful.
Regards, Roger Bass. |
