Spent a day with nice folks at Tekelec the other day.  I know them pretty well so there were no big surprises in terms of product strategy—they are signaling specialists on both the SS7 and IP side of the telco network and they have some ancillary products that build off of that position of strength.  They’ve been excelling in this area for years.   The question that always hounded them was, “what happens to Tekelec once when everything goes IP”??  Theoretically, with the SS7 footprint getting smaller and smaller, companies like Tekelec would be left out of the party without a drastic re-invention.  Its actually not true.

First of all, the idea that signaling issues go away with the introduction of layer 5 IP session control protocols like SIP is a pipe dream.  In fact, they may even be exacerbated given the fragmentation that we’ve witnessed in terms of proprietary SIP extensions softswitch and IMS vendor insist on for a number of reasons.  Tekelec removes all of this pain by sitting in the middle and playing quarterback, i.e. doing all of the necessary session and management control and even better, reducing capex and opex by increasing headroom on deployed equipment.  Check out there SSR product for more detail.

So, what did surprise me?  The discussion with the CFO.  Tekelec has been rewarded for its relevance in the center of the signaling network, or at least they haven’t been decimated like so many others.   Mr. Everett showed a great chart tracking the stock performance of several telco industry bellweathers for the past year including Acme Packet, Alcatel-Lucent, Sonus, Nortel, Ericsson, etc, etc.  TKLC beat them all, albeit with single digit price growth.  But they did GROW.  They’ve also got the type of balance sheet that affords their customers the sense of comfort that they’ll be around for a while.  This is especially important these days.  Lets see if they can keep it up.