[VoiceOps] Acquire MetaSwitch

Peter Rad peter at 4isps.com
Wed Aug 14 20:25:50 EDT 2024


Companies that big have a rule, if it isn't a $100M in revenue quick, it 
gets killed.

Quarterly revenue is $60B!

A $100M product is a 0.17% of revenue.

Metaswitch's 2019 financial report shows annual revenue of $180 million.

Selling telco gear isn't a billion dollar business.


Revenue in Productivity and Business Processes was $20.3 billion and 
increased 11% (up 12% in constant currency), with the following business 
highlights:

·Office Commercial products and cloud services revenue increased 12% (up 
13% in constant currency) driven by Office 365 Commercial revenue growth 
of 13% (up 14% in constant currency)

·Office Consumer products and cloud services revenue increased 3% (up 4% 
in constant currency) and Microsoft 365 Consumer subscribers grew to 
82.5million

·LinkedIn revenue increased 10% (up 9% in constant currency)

·Dynamics products and cloud services revenue increased 16% driven by 
Dynamics 365 revenue growth of 19% (up 20% in constant currency)

Revenue in Intelligent Cloud was $28.5 billion and increased 19% (up 20% 
in constant currency), with the following business highlights:

·Server products and cloud services revenue increased 21% (up 22% in 
constant currency) driven by Azure and other cloud services revenue 
growth of 29% (up 30% in constant currency)

Revenue in More Personal Computing was $15.9 billion and increased 14% 
(up 15% in constant currency), with the following business highlights:

·Windows revenue increased 7% (up 8% in constant currency) with Windows 
OEM revenue growth of 4% and Windows Commercial products and cloud 
services revenue growth of 11% (up 12% in constant currency)

·Devices revenue decreased 11% (down 9% in constant currency)

·Xbox content and services revenue increased 61% driven by 58 points of 
net impact from the Activision acquisition

·Search and news advertising revenue excluding traffic acquisition costs 
increased 19%

Microsoft returned $8.4 billion to shareholders in the form of share 
repurchases and dividends in the fourth quarter of fiscal year 2024.



On 8/14/2024 6:05 PM, Jeff Brower wrote:
>
> Peter-
>
> What I think you're saying is that Microsoft acquired Metaswitch 
> because of their cloud native communications technology, and they 
> still like that, but are now shedding the physical equipment part of 
> the business.
>
> That makes business sense for Microsoft Sr management, but there is 
> revenue in non-Azure edge communications and AI, maybe not M$ level of 
> multiple billions, but substantial and growing. Retail surveillance, 
> robotics in factories, automated vehicles, etc need communications and 
> inference specifically not in the cloud -- cheap, instant response, 
> 100% fail-safe reliable, and private. I find it hard to see Metaswitch 
> guys who spent 25+ years building a successful combined hardware + 
> software business, who were very good at it and for whom AI is a 
> natural fit with their signal processing and HPC background, watching 
> it and their customer base disappear. But as you say, maybe they are 
> happy with it.
>
> -Jeff
>
> Quoting Peter Rad via VoiceOps <voiceops at voiceops.org>:
>
>> That's not happening.  The Metaswitch employees I know that are left 
>> are happy taking marching orders from M$.
>>
>> The problem the softswitch industry had was that the pie was stable. 
>> It wasn't growing, so you weren't selling new logos. You were just 
>> supporting customers - and that isn't a growth business nor is it a 
>> profitable business.
>>
>> The problem is that of the 900 operators using Metaswitch in the US, 
>> most are mom and pop and rural. That doesn't convert to "Going Azure."
>>
>> These mom-and-pop's will have to make due with what they have for the 
>> next 5 years - and use that 5 years as a runway for an exit strategy.
>>
>> The largest Metaswitch white-label provider just went to CXDO, so the 
>> writing on the wall that I have been seeing for 2 years, others are 
>> now seeing.
>>
>> Regards,
>>
>> Peter @ RAD-INFO
>>
>> On 8/13/2024 3:54 PM, Jeff Brower via VoiceOps wrote:
>
> Not sure about Affirmed, but I know some of the original MetaSwitch 
> guys, and a few still at Microsoft. They were, and I suspect still 
> are, extremely dedicated and capable. My guess is they will find a way 
> to spin out /  buy out MetaSwitch in some form it will continue.
>
> -Jeff
>
> Quoting Jawaid Bazyar via VoiceOps <voiceops at voiceops.org>:
>
>> I have a use case. The use case is, be in a position to take 
>> customers tomorrow on a 5/9's platform.
>> One alternative is Ribbon: that solution is out of my price range, 
>> and, likely out of price range of every rural ILEC I know.
>> A second is Squire, but, I'm not willing to risk it w/o getting my 
>> hands on a long-term trial which was requested but not offered.
>> The final alternative is to throw into developing one, likely in two 
>> phases. The orchestration and front end of the Elephant Talk project 
>> is complete, now just need to settle on a production backend.
>>
>> On Tue, Aug 13, 2024 at 3:33 PM Alex Balashov via VoiceOps 
>> <voiceops at voiceops.org> wrote:
>>
>>     I suppose this all raises the question of why on earth you'd want
>>     to acquire a Metaswitch, but you've clearly got an angle.
>>
>>     -- Alex
>>
>>     > On Aug 13, 2024, at 3:20 PM, Jawaid Bazyar via VoiceOps
>>     <voiceops at voiceops.org> wrote:
>>     >
>>     > "Microsoft's end game is for every operator to have a big pipe
>>     to Azure to access Metaswitch, vSBC, Teams and other components."
>>     >
>>     > My question is, can you actually run a MetaSwitch CFS in Azure?
>>     Because to my knowledge, you cannot.
>>     >
>>     > I would be very interested if I was wrong about this.
>>     >
>>     > Jawaid
>>     >
>>     >
>>     > On Tue, Aug 13, 2024 at 12:56 PM Peter Rad via VoiceOps
>>     <voiceops at voiceops.org> wrote:
>>     > Besides getting rid of their Max UC softphone (to make MS Teams
>>     THEE softphone), they did EOL a lot of the Meta product.
>>     >
>>     > We - RAD-INFO, ECG and Andrew Ward - did a webinar about it in
>>     May. You can watch the recording here:
>>     https://info.ecg.co/webinar-recording-broadworks-metaswitch-netsapiens-ribbon
>>     >
>>     > Microsoft's end game is for every operator to have a big pipe
>>     to Azure to access Metaswitch, vSBC, Teams and other components.
>>     >
>>     >
>>     > Let me know if there is anything I can do for you. Thank you.
>>     >
>>     > Regards,
>>     >
>>     > Peter Radizeski
>>     > RAD-INFO INC
>>     > Telecom Consultant
>>     > Bandwidth * Voice * Cloud * Data Center * Internet * CyberSecurity
>>     > (813) 963-5884
>>     >
>>     >
>>     >
>>     > On 8/13/2024 8:41 AM, Mike Hammett via VoiceOps wrote:
>>     >> "Given the MetaSwitch products are no longer sold, and
>>     Microsoft is EOLing them, and not taking new support contracts..."
>>     >>
>>     >>
>>     >> That's news to me.
>>     >>
>>     >>
>>     >>
>>     >> -----
>>     >> Mike Hammett
>>     >> Intelligent Computing Solutions
>>     >> http://www.ics-il.com
>>     >>
>>     >>
>>     >>
>>     >> Midwest Internet Exchange
>>     >> http://www.midwest-ix.com
>>     >>
>>     >>
>>     >>
>>     >> From: "Jawaid Bazyar via VoiceOps" <voiceops at voiceops.org>
>>     >> To: "voiceops" <voiceops at voiceops.org>
>>     >> Sent: Tuesday, August 13, 2024 7:23:05 AM
>>     >> Subject: [VoiceOps] Acquire MetaSwitch
>>     >>
>>     >> Hello,
>>     >>
>>     >> We are in the market to acquire / take over a MetaSwitch CFS.
>>     In particular, we're looking for the virtual edition that runs
>>     purely in VMWare.
>>     >>
>>     >> The components we'd need are:
>>     >>     CFS
>>     >>     MRS (Media Resource Server)
>>     >>     Perimeta
>>     >>     SAS (Service Assurance Server)
>>     >>     MetaView Server
>>     >>
>>     >> These are fairly common components.
>>     >>
>>     >> Given the MetaSwitch products are no longer sold, and
>>     Microsoft is EOLing them, and not taking new support contracts,
>>     we're not talking about a big cash up front kind of deal, but,
>>     instead a revenue share kind of arrangement.
>>     >>
>>     >> Anyone that has one and is interested, contact me directly
>>     off-list.
>>     >>
>>     >> Cheers,
>>     >>
>>     >> Jawaid
>>     >>
>>     >>
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>>     --
>>     Alex Balashov
>>     Principal Consultant
>>     Evariste Systems LLC
>>     Web: https://evaristesys.com
>>     Tel: +1-706-510-6800
>>
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