Vancouver-based VoIP pioneer LogiTel prepares for new launch, significant growth
LogiTel Corp. is poised for take-off. A Vancouver-based provider of software-based Voice over Internet Protocol (VoIP) solutions, the company is only two years old, but new CEO Michael Franz predicts “significant growth” over 2005 – in fact, he expects LogiTel’s 12-employee staff to double in the next six months.
“We’re at a point where it will spread like wildfire,” said Franz.
LogiTel will be launching a new generation product within the next 60 days that fully integrates wireless capabilities into the entire LogiTel VoIP solution. Within the next three to four months, they expect to roll out an entirely new suite of products. LogiTel is a private company and is not required to share exact financial numbers.
However, Franz stated that LogiTel exceeded its goals in 2005, and will continue that type of performance in 2006.
Founded in 2004, LogiTel is a relatively new telecom player in Clark County. But its top staff members are anything but new to the telecom field. President and founder Craig Spiegelberg has 23 years in executive and consulting positions with telecom companies, including top positions at Sprint Corp. After leaving Sprint in 2001, Spiegelberg worked with a specialized telecom firm in Bend, Ore., before coming to Vancouver to launch LogiTel.
“I was looking at the enormous upcoming technology changes in the telecom industry – I knew they could be lucrative to people who knew how to surf those changes,” said Spiegelberg.
On Oct. 1, 2005, Franz joined the company as CEO. Franz had known Spiegelberg at Sprint, and is a telecom expert in his own right. Franz brings to LogiTel more than 20 years’ executive management experience, with an emphasis on telecommunications. Having succeeded in both startup environments as well as the international corporate world, he is well positioned to move with LogiTel from one phase to the other. Franz said he was attracted to LogiTel and the Vancouver area for several reasons.
First, he was confident that Spiegelberg understood the “big picture” of telecom technology, and that if Spiegelberg thought he was onto something, he probably was. Second, Franz said he believed that you need to be in a dynamic market space with the right product and company – and he felt LogiTel represented just such a market space. Lastly, he saw that the talent pool of the Pacific Northwest, and the Vancouver/Portland area in particular, may be a good fit for the products.
For Spiegelberg, too, the choice to locate his company in the Vancouver area was no accident. The market, he said, contained just the type of customers Spiegelberg wanted to target: small- to medium-sized enterprises and small telecom carriers. Plus, Spiegelberg was familiar with the Pacific Northwest – he grew up in Bellevue and received degrees from Oregon State University and the University of Washington.
By all accounts, the VoIP industry, too, is about to take off. A recent Yankee Group study stated that the VoIP business market is projected to grow as high as $3.3 billion worldwide by 2010. An FTI report published in late 2005 paints an even brighter picture, predicting that because less than five percent of the world’s 400 million PBX lines, or standard telephone systems, had transitioned to VoIP by the end of 2003, the enterprise VoIP market would be equal to about $5 billion at the end of 2005. FTI is Forensic Technologies International Corp., which provides various consulting services to companies.
Moore’s Law, which states that the computing capacity will double every 12 to 18 months, has driven the personal computing world for years. But Franz said that Moore’s Law hasn’t yet entered the telephone market, calling it “pretty much the same as in Alexander Graham Bell’s time.” VoIP, said Franz, is going to be the entrance point for Moore’s Law for telecom.
Spiegelberg agreed, saying, “All the savings and new capability, as in computing, will now be possible.”
Franz also said that the telecom industry was beginning a new, healthier growth cycle. During the dot-com boom, said Franz, business sense was turned on its head, where “good businesses couldn’t get funding, but crazy businesses could.” Now, he said, telecom businesses are leaner and more focused, and industry growth will be more predictable and steady.
LogiTel, claimed Franz and Spiegelberg, is an example of a company that will succeed in this new cycle, because its product line integrates regular telephone lines, VoIP, and wireless, which allows customers to cut telecommunications costs while greatly increasing communication efficiency.
“It’s not a future product – it’s a now product,” said Franz.
LogiTel formed a marketing partnership with New Edge Networks in the summer of 2005, through the Retail Broadband Alliance. New Edge, a newly purchased subsidiary of Earthlink that provides private multi-location broadband networks for business and carrier customers, is a natural partner for LogiTel, since business-quality VoIP requires a broadband network.
2005 was a positioning year, with 90 percent of LogiTel customers being regionally based. Having just successfully completed another round of financing, LogiTel is in the process of signing additional partnerships with local as well as national and international dealers, and is about to launch a much broader marketing campaign. They will have a presence at two major telecom conferences in March – the VON (Voice over the Net) and CompTel conferences.
“2006 will be the key year,” said Franz.
