The Man Behind the Cloud
BroadSoft CEO Michael Tessler helped pioneer hosted VOIP services by selling software to service providers. Now he's expanding his model.
Michael Tessler is the co-founder and CEO of BroadSoft Inc, a market-leading provider of hosted Unified Communications software and services that powers solutions for over 500 service providers in 65 countries. The BroadSoft brand isn't particularly well known among end users, but that's by design. BroadSoft wants its service provider customers to determine their own offers, set their own prices, and promote their own brands.
It's a model that seems to work. Customers include AT&T, Verizon, and Comcast here in the US and 20 of the top 25 service providers worldwide. BroadSoft operates in the Americas, Europe, the Middle East, Africa, and Asia Pacific.
BroadSoft offers three main product portfolios. BroadWorks is its core hosted softswitch product that service providers license in order to host SIP Trunking and UC services. BroadCloud is a family of hosted services and applications that service providers can rebrand. BroadTouch includes advanced rebrandable applications such as mobile clients.
Prior to founding BroadSoft, Mr. Tessler served as Vice President of Engineering at Celcore, a wireless equipment company eventually acquired by Alcatel. He also held several senior positions at Nortel Networks, where he built and deployed advanced services on local carrier networks. He has two patents in the area of local switching, Advanced Intelligent Network (AIN), and advanced call management services. Mr. Tessler holds Bachelor of Science and Master of Science degrees in Electrical Engineering from McGill University in Montreal.
Last November, BroadSoft announced its Q3 FY12 results that included quarterly revenue of $40.2 million, up 13% from the prior year along with non-GAAP gross profit of 84% of revenue, and income from operations of $10.5 million. Q4 results will be announced on February 27.
Last October, at its annual BroadSoft Connections event, BroadSoft announced its UC-One platform offering an improved user experience, rich mobility tools, video conferencing, and simplified go-to-market packages for its service provider customers.
As a hosted VoIP pioneer, BroadSoft has outlived many competitive services including Level-3 (3Tone) and AT&T (Callvantage). It has also made a number of acquisitions over the years including Adaption (2012), iLinc (2011), Sylantro (2008), and GENBAND's M6 Communication Applications (2008). The firm trades on NASDAQ (BSFT), and is headquartered in Gaithersburg, MD--the approximate halfway location between its two founders.
DM: BroadSoft started in 1998 as a pure VoIP play geared toward providers--pre cloud, pre SIP, limited broadband availability. What were you thinking?
MT: When Scott Hoffpauir, my co-founder, and I decided to take the leap and start a company, we found that the world of VoIP had just started and was focused around using VoIP as a technology to bypass long distance charges. Many companies were creating these LD bypass gateways, and the industry in general was focused on hardware and on the transport layer. With our experience at Nortel in both fixed and mobile networks, and our experience building a next generation mobile switching system at Celcore [company bought by DSC and then DSC bought by Alcatel], we realized that the game would switch to the application layer. We also wanted to make this a software business, using standard hardware. We had both seen the complexity of delivering on proprietary hardware and felt that a pure-play focused on a software model would be the right strategy.
What were we thinking? Well, I think the reality was that we were not really thinking. We had no idea how hard some things would be, but that's the great thing of a start up. You can have blind belief.
This was definitely pre-SIP. In fact, a funny story was that I was just about to sign a very large purchase order to buy a H.323 protocol stack, and Scott asked me to stop. He said he had a hunch that this new protocol that was gaining some interest would be the future. That was SIP. There were no products that spoke SIP at the time, so this was a very large gamble.
Our two biggest innovations early on were the use of SIP for enhanced, end user services and making SIP a protocol that could be used to separate the application layer from the infrastructure. Betting on SIP as the preferred protocol, Scott and I evangelized its benefits and convinced some very early companies to build interfaces from our application to the infrastructure. We also worked with a number of device vendors, helping them implement SIP on their devices. These two innovations really kicked-off the application server category.