Startup Hopes To Create New Market For Voice Services - InformationWeek

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Startup Hopes To Create New Market For Voice Services

Nearly two years after its formation, Vpacket Communications Inc. launches its first products Monday with the intent of creating a new market for voice services delivered over packet-switching networks.

With the introduction of its 6100 Series router and voice-network-management system, Vpacket is targeting service providers that want to deliver combined voice and data services over a single network to small and medium-sized companies. Company execs say service providers will benefit from simplified provisioning and management, as well as increased revenue generated by their so-called local loops, or the last mile of their networks. Business users, meanwhile, could realize significant cost-savings by integrating their voice and data applications.

"There's really no good, simple solution that performs this function," says Vpacket CTO Jim Zeitlin. "We can deliver the first products for a large range of carriers."

Larry Hettick, VP of consulting for Telechoice Inc., says Vpacket's real strength will be in its ability to deliver enterprise-quality voice service over a distributed network that can be managed from a single location. "Those are things you look for in a vendor that's going to put your voice over an IP network," says Hettick.

One intangible Vpacket has going for it is the involvement of heavy hitters. Zeitlin, CEO Abe Wei, CFO Rob McCormick, and VP of sales Art Hoffman all are former execs of either Ascend Communications or Lucent Technologies. And venture firm New Enterprise Associates-famed for its investments in communications companies such as Ascend and 3Com Corp.-has thrown in about $10 million of the $16.5 million the company has raised to date. Peter Morris, general partner with New Enterprise Associates venture capital investors, says the combination of proven management and the creation of a new market was too tempting to ignore, and that the firm plans to remain "fully engaged" in Vpacket. "It's a product that's anticipating the explosion of converged networks," Morris says.

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