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October 26, 2006
Aricent Makes Its Debut
By Richard Grigonis, Executive Editor, IP Communications Group
Normally, when a new company makes its debut, Yours Truly will cross his fingers and wish good luck upon the company’s uncertain future. That won’t be necessary with Aricent, which comes out of the gate as a market leader in communications software, with 125 software products and already enjoying over $300 million in annual revenue.
How is this possible, you ask? Aricent’s pre-packaged success builds on the success of its predecessor, Hughes Software Systems, founded in 1991. The company became Flextronics (News - Alert) Software Systems (FSS) in 2004 when it was acquired (along with several other companies) by Flextronics International (News - Alert) Ltd. On September 4, 2006 the company gained its independence when it was acquired for about $900 million by Kohlberg Kravis Roberts & Co. (KKR) and Sequoia Capital, which is now followed by the name change to Aricent. Additionally, frog design, a leading strategic, creative consulting firm, had been acquired by Flextronics in 2004 and has been part of the software development and solutions business since the summer of 2005. It will continue to operate as an independent division of Aricent.
On the day prior to Aricent’s October 26, 2006 launch, Yours Truly talked with Aricent’s Chief Strategy Officer and executive vice president, Sanjay Dhawan.
“Communications used to be very simple,” Dhawan said. “There used to be two different parallel networks, the PSTN and a data network. On the PSTN side, you pick up the phone and make a phone call; SS7 signaling the takes place to connect your call to the appropriate party. On the data side, a similar, parallel network used to exist, with some basic routing and switching technologies to move emails, do file transfers, or otherwise move data from a source to a destination. Today, however, things are very complex in the sense that there are mega-convergence drivers appearing among various different technologies involving voice, video and data. It’s taking place on handsets, desktops, and home PCs. As a result, a new backend infrastructure is being built, which in turn creates more and more complexity on the communications software side.”
“That’s where Aricent’s comes in,” Dhawan said. “Our focus is as a pure-play communications software product and services company. On the product side we have a wide range of communications software that we provide to our customers. We also offer R&D Professional Services to our customers.”
“We have about 6,700 employees worldwide right now in 25 offices,” Dhawan said. “We operate in 13 countries; our corporate headquarters is in Palo Alto, California. We do a bit more than $300 million in annual revenue.”
“We have over 350 customers worldwide,” Dhawan said, “and you can place them into three different categories: Networking equipment manufacturers [Alcatel (News - Alert)/Lucent, Cisco, Ericsson (News - Alert), Nokia and Nortel], device manufacturers [Motorola, NEC, Nokia, Samsung, Sony Ericsson and Texas Instruments], and service providers [Airtel, Direcway, Immarsat, Sprint, Virgin Mobile and Vodafone].
Dhawan elaborated: “All ten Tier-1 equipment manufacturers are Aricent customers, with Nokia being our number one customer — we have a team of about 900+ R&D engineers focused on working with Nokia. We have eight of the ten top device manufacturers as customers, and our new growing business is on the service provider side. We have many deep, strong relationships with major companies.”
“We design, develop and maintain communications software for these companies,” Dhawan said, “providing building blocks or products to our OEMs, the leading communication companies. We engage with them from strategy to implementation. We cover everything from handsets to core infrastructure products. We work with different physical layer communications mediums involving wireless, wireline, cable and satellite technologies. Finally, we build everything from complex applications to code for the core switching and routing infrastructure. For example, if you look at Lucent’s base station router product line, that resulted from a joint R&D effort between Aricent and Lucent. Likewise, we’re a very close partner with Alcatel to build, enhance and maintain their ATM and IP DSLAM product lines.”
“About 80 percent of our revenue derives from services,” he added, “and about 20 percent of our revenue comes from selling products. Having said that, if you talk to most of our OEM customers, they’ll tell you that reason they love to partner with Aricent and the reason we are a strategic partner to our OEM customers, is the fact that we have a product culture in this company, and that product culture comes from running a very strong team of 450 to 500 people who build a very broad product portfolio.”
“We provide complete lifecycle R&D services,” Dhawan said, “which starts from strategic design and then moves on to system design, the actual implementation of the product, system integration, verification, testing and maintenance. Of course, as I’ve said, what’s unique about us is that we’re focused solely on communications software; that’s all we do. We don’t do general purpose software development and services, such as other companies. Just as you have ‘Intel Inside’ for PCs and you have ‘Microsoft Inside’ for running operating systems on your desktop, we want to be the ‘Aricent Inside’ for communications software.”
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Richard Grigonis is an internationally-known technology editor and writer. Prior to joining TMC, he was the Editor-in-Chief of VON Magazine from its founding in 2003 to August 2006. He also served as the Chief Technical Editor of CMP Media’s Computer Telephony magazine (later called Communications Convergence (News - Alert) (News - Alert)) from its first year of operation in 1994 until 2003. In addition, he has written five books on computers and telecom (including the Computer Telephony Encyclopedia and Dictionary of IP Communications). To see more of his articles, please visit his columnist page.
How is this possible, you ask? Aricent’s pre-packaged success builds on the success of its predecessor, Hughes Software Systems, founded in 1991. The company became Flextronics (News - Alert) Software Systems (FSS) in 2004 when it was acquired (along with several other companies) by Flextronics International (News - Alert) Ltd. On September 4, 2006 the company gained its independence when it was acquired for about $900 million by Kohlberg Kravis Roberts & Co. (KKR) and Sequoia Capital, which is now followed by the name change to Aricent. Additionally, frog design, a leading strategic, creative consulting firm, had been acquired by Flextronics in 2004 and has been part of the software development and solutions business since the summer of 2005. It will continue to operate as an independent division of Aricent.
On the day prior to Aricent’s October 26, 2006 launch, Yours Truly talked with Aricent’s Chief Strategy Officer and executive vice president, Sanjay Dhawan.
“Communications used to be very simple,” Dhawan said. “There used to be two different parallel networks, the PSTN and a data network. On the PSTN side, you pick up the phone and make a phone call; SS7 signaling the takes place to connect your call to the appropriate party. On the data side, a similar, parallel network used to exist, with some basic routing and switching technologies to move emails, do file transfers, or otherwise move data from a source to a destination. Today, however, things are very complex in the sense that there are mega-convergence drivers appearing among various different technologies involving voice, video and data. It’s taking place on handsets, desktops, and home PCs. As a result, a new backend infrastructure is being built, which in turn creates more and more complexity on the communications software side.”
“That’s where Aricent’s comes in,” Dhawan said. “Our focus is as a pure-play communications software product and services company. On the product side we have a wide range of communications software that we provide to our customers. We also offer R&D Professional Services to our customers.”
“We have about 6,700 employees worldwide right now in 25 offices,” Dhawan said. “We operate in 13 countries; our corporate headquarters is in Palo Alto, California. We do a bit more than $300 million in annual revenue.”
“We have over 350 customers worldwide,” Dhawan said, “and you can place them into three different categories: Networking equipment manufacturers [Alcatel (News - Alert)/Lucent, Cisco, Ericsson (News - Alert), Nokia and Nortel], device manufacturers [Motorola, NEC, Nokia, Samsung, Sony Ericsson and Texas Instruments], and service providers [Airtel, Direcway, Immarsat, Sprint, Virgin Mobile and Vodafone].
Dhawan elaborated: “All ten Tier-1 equipment manufacturers are Aricent customers, with Nokia being our number one customer — we have a team of about 900+ R&D engineers focused on working with Nokia. We have eight of the ten top device manufacturers as customers, and our new growing business is on the service provider side. We have many deep, strong relationships with major companies.”
“We design, develop and maintain communications software for these companies,” Dhawan said, “providing building blocks or products to our OEMs, the leading communication companies. We engage with them from strategy to implementation. We cover everything from handsets to core infrastructure products. We work with different physical layer communications mediums involving wireless, wireline, cable and satellite technologies. Finally, we build everything from complex applications to code for the core switching and routing infrastructure. For example, if you look at Lucent’s base station router product line, that resulted from a joint R&D effort between Aricent and Lucent. Likewise, we’re a very close partner with Alcatel to build, enhance and maintain their ATM and IP DSLAM product lines.”
“About 80 percent of our revenue derives from services,” he added, “and about 20 percent of our revenue comes from selling products. Having said that, if you talk to most of our OEM customers, they’ll tell you that reason they love to partner with Aricent and the reason we are a strategic partner to our OEM customers, is the fact that we have a product culture in this company, and that product culture comes from running a very strong team of 450 to 500 people who build a very broad product portfolio.”
“We provide complete lifecycle R&D services,” Dhawan said, “which starts from strategic design and then moves on to system design, the actual implementation of the product, system integration, verification, testing and maintenance. Of course, as I’ve said, what’s unique about us is that we’re focused solely on communications software; that’s all we do. We don’t do general purpose software development and services, such as other companies. Just as you have ‘Intel Inside’ for PCs and you have ‘Microsoft Inside’ for running operating systems on your desktop, we want to be the ‘Aricent Inside’ for communications software.”
--------
Richard Grigonis is an internationally-known technology editor and writer. Prior to joining TMC, he was the Editor-in-Chief of VON Magazine from its founding in 2003 to August 2006. He also served as the Chief Technical Editor of CMP Media’s Computer Telephony magazine (later called Communications Convergence (News - Alert) (News - Alert)) from its first year of operation in 1994 until 2003. In addition, he has written five books on computers and telecom (including the Computer Telephony Encyclopedia and Dictionary of IP Communications). To see more of his articles, please visit his columnist page.
