Incumbent carriers tend to shun young suppliers in favour of big, established equipment makers, said Jim Dolce, Unisphere's president and chief executive officer.
"There's an obvious radical shift in the telecom market. CLECs [competitive local exchange carriers] have disappeared," Dolce said.
CLECs were more willing to buy modern packet voice equipment than large established carriers, but the telecommunications market meltdown of the past year wiped out most newer phone competitors.
Dolce said that because incumbent carriers have found comfort working with very large equipment companies, Unisphere found itself partnering with Siemens anyway.
Siemens Information and Communications Networks (IC Networks), a unit of Siemens AG, will take Unisphere's voice network equipment business into its convergence portfolio, leaving Unisphere with its packet data network equipment operation.
IC Networks will get Unisphere's SMX 2100 media gateway, a network device to switch phone calls between an ATM (Asynchronous Transfer Mode) network and an IP network. It will also receive Unisphere's SRX softswitch business products, which manage phone calls on packet and circuit networks. Unisphere will keep its edge routers and switch routers.
Siemens resells Unisphere equipment in Europe with some success, but Unisphere has not been so fortunate in the US. To its benefit, geographic diversification has somewhat insulated Unisphere from regional market conditions, but two-thirds of its total annual sales are outside the US, in part because the largest North American carriers have been courted aggressively by larger equipment makers such as Lucent Technologies.