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With Strong Focus on VoIP and SIP Trunking, XCast Sees $2.7 Million Investment

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June 03, 2009

With Strong Focus on VoIP and SIP Trunking, XCast Sees $2.7 Million Investment

By Michael Dinan, TMCnet Editor

It only makes sense, in this slower economy, that a multi-million dollar investment in a technology company would be fueled by rising interest in cost-saving, flexible products that more and more businesses are turning to as they navigate the recession.

And moments ago, a Santa Monica, Calif.-based company that focuses on media, technology and renewable energy announced that it’s investing $2.7 million in a provider of SaaS digital voice and video solutions.
Officials at Siemer and Associates say that a strong intellectual property portfolio and an experienced management team drove their interest in Los Angeles-based XCast Labs, an SaaS (News - Alert) provider whose hosted platform can deliver video telephony, IP-PBX, SIP trunking and other advanced IP applications.
Also, Siemer’s chief executive officer, David Siemer, said, “XCast (News - Alert) is well positioned to lead the change of how unified communications is utilized in numerous market segments.”
That’s because VoIP, the backbone of UC, increasingly is being delivered through SIP trunking. In general, SIP trunking is a service offered by Internet telephony service providers so that businesses can adopt VoIP using their Internet connection. That way, they can communicate with others who rely on the PSTN, since the enterprise IP-PBX (News - Alert) is connected to the service provider’s PSTN gateways over the Internet.
Officials at Siemer cite one recent report from analysts at Infonetics Research (News - Alert) that says SIP trunking will grow at an annual rate of about 89 percent through 2013, and that hosted UC, fueled by VoIP services growth, also is expected to rise. Even with the recession taking hold in September, VoIP services grew 33 percent last year and has grown again in the early part of 2009.
Siemer’s strong view of SIP trunking – and XCast’s use of the technology – echoes much of what we’ve heard from industry expert Anders Eriksson, chief executive officer of Stockholm-based Ingate Systems, a company that develops firewall technology and products that enable SIP communications for the enterprise while maintaining control and security at the network edge.
“I think we are coming to a situation where SIP trunking is really coming off as a market phenomenon,” Eriksson told TMCnet recently during ITEXPO East. “We have been working since 2001 with the SIP development and you know we’re waiting for it to stick. But more and more, I think the market now is telling us that it’s taking off and that it’s becoming a standard technology.”
Other XCast investors include Frontera Capital, members of the Pasadena Angels and XCast’s own co-founder and chief executive officer, Cliff Rees (News - Alert).
According to Rees, unlike some VoIP providers who are struggling to stay afloat, XCast Labs “ stands alone in regard to its financial stability, service quality, support, functionality and cost.”
“This round of funding will enable us to achieve profitability by Q1 of 2010,” he said. “As we developed and own all the core aspects of our technology, we have a much lower cost basis than any other provider.”

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan

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