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Technology Stocks : Dialogic ready to soar, funds buying

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To: cecil who wrote (601)11/23/1998 3:58:00 PM
From: JEM  Read Replies (1) of 674
 
Cecil,

At one time a few short months ago, most people thought that the board makers (Dialogic and Natural Micro) were going to have a field day in the VoIP space. Slap some boards into an NT server, buy an H.323 stack and you were in the VoIP gateway business.

Problem is that the NT server architecture might be okay for the enterprise, but just is not enough of a real time operating system to do voice properly.

If you look at the second generation VoIP cards from these guys, they have external ethernet interfaces on their PCI cards. This means the only thing the PCI cards were using NT server for is power (and sometimes a call control API).

But even for the people that need call control applications, the industry is starting to move to MGCP so that applications are deployed in the network and not on the gateways. There are many reasons for this, but that is another subject.

So, for what once looked like a very bright future in the VoIP space has dimmed considerably. If you look at most of the large VoIP networks being deployed, most do not use these guys' boards, most are using embedded technology, leveraging architectures that look like Remote Access Servers. The larger VoIP networks that come to mind are ICG/Netcom, VIP Calling, USA Global Link, net2phone using these style gateways.

Dialogic's talent in life is building high density DSP based boards. You might think that this gives them an advantage in the VoIP space, but it doesn't. To understand why, ask yourself the question "Why aren't dial(modem) platforms built out of Dialogic cards?" Instead, people like Ascend used proprietary architectures (not Dialogic cards) to do very competitively.

And VoIP is far tougher than dial. Much more signaling and real time constraints.

And the final question to ask, will all of those DSPs out there in the VoIP gateways be used for CTI, Dialogic's core business. Sure, but not to the extent that is required by speech recognition. Cisco's latest VoIP gateway on the 5300 has IVR built right into the gateway.

Just the way I see it, but hope it helps.

JEMstar
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