The need for carriers to maximise profits means back-office automation is taking on an increasingly important role in the wholesale market. Within this field, Global Convergence Solutions (GCS) has been making a name for itself by concentrating on inter-carrier automation.
The company claims that, in some instances, its customers have improved gross wholesale margins by more than 20% and reduced their workforce to one tenth of its original size for the same amount of revenue.
It is a bold statement from a relatively young company. The roots of GCS began in 2004 after several employees of US wholesale VoIP provider, ITXC, left the company when it was acquired by Teleglobe. Among those who departed were Neal Axelrad, head of North American sales, and Jay Meranchik, VP of operations and engineering.
Two years later the two decided to utilise the wholesale expertise they had developed in a consultancy capacity at ITXC by forming GCS - with Axelrad taking the position of CEO and Meranchik becoming CTO and co-founder.
In 2006, the larger Tier 1 and Tier 2 carriers were making the migration from TDM to IP, many of which didn’t have expertise in next-generation VoIP. Mark Delaney, marketing and business developer at GCS, claims the company arrived in time to help provide support.
It was during this period, however, that the company also noticed that its customers were experiencing back-office systems problems similar to what they had seen at ITXC. Back-office systems had not evolved in tandem with network technology, and as a result carriers were managing their next-generation networks using solutions designed for TDM.
The company took it upon itself to solve this problem by building a back-office solution with next-generation and IP-based management tools. In 2008, GCS’ route management solution was launched, which allows carriers the ability to control the routing of calls across their networks. This was followed in 2009 by the launch of a rate management system to help carriers better manage their billing and rating systems.
The power of automation
Delaney says the company’s experience in the carrier market has played a strong role in growing its customer base. “Our support team and our software developers worked at ITXC so we approach the business the way a carrier approaches it. Telarix and the other players have great solutions but they approach it like they are software companies,” he adds.
Through its carrier tailored approach to the automation business, GCS claims to be able to automate 95% of the tasks that carriers perform on a daily basis, allowing customers to reduce their headcount while also being able to cater for more interconnects. “You cannot be successful as a modern day carrier, with the technology advances that have happened and the scalability that you need to generate, without automation,” says Delaney.
Last year, the company signed an important contract with voice provider iBasis. The carrier approached GCS to improve its US domestic traffic, where complex rules and regulations for termination make automation particularly effective for routing. Delaney claims that GCS has since maximised the company’s traffic margins. He also hopes it will pave the way for other international carriers to follow suit.
He says that as revenues for the traditional wholesale voice market continue to decline, inter-carrier automation providers such as GCS are in a position to help support both TDM voice services and VoIP. “We see this as a robust marketplace that is filled with nothing but entrepreneurial opportunity,” he says.
Opportunities with OTT players
Having already equalled its revenues for 2011 so far this year and with a customer base of 60 companies, including Earthlink and KDDI, GCS is now looking for further growth opportunities.
Signalling its intent, the company announced a merger with software development and sales company Mount Knowledge Holdings (MKHD) in June. By merging with the publically held MKHD, GCS believes that it will gain the necessary financial standing and stability to attract Tier 1 carrier customers, which may have previously overlooked the company. All without the need for venture capital investment.
“We think there is an opportunity in the next two years to become a dominant player in the marketplace, changing not only voice communications in terms of how it is managed, but also looking to extend to all communication modalities,” says Delaney.
One of the steps towards market dominance is in what Delaney describes as the company’s “grand vision” for serving OTT players in need of automation services.
GCS believes that the likes of Google and Facebook will be part of a group of social media companies coming into the market that will want to utilise not only voice, but SMS, email and instant messaging. “There has to be a mechanism which allows you to intelligently route these messages to and back from each other in a cost-effective way,” says Delaney. “We think by developing for inter-carrier voice we’ve built the first rung on the ladder.”
GCS is also keen to diversify its customer base geographically and hopes that combining with MKHD will provide it with the necessary investment in sales and marketing to do so. At the moment 75% of the company’s sales are drawn from North America, but Delaney hopes for a broader geographical spread and is eyeing opportunities in Central and Latin America, as well as western Europe and Asia.
The third and final step
With eyes firmly fixed on the future, GCS launched the third leg of its product stool in 2012, a peer-to-peer web-based service that allows for mass information exchange between carriers.
Among the functionality being developed is a system to allow carriers to submit wholesale rates in real time and broadcast them via email for customers to accept or decline. Should a customer choose to accept, the routing will be updated and the traffic will automatically be allowed to flow. This will be GCS’ next step for the portal, and the company is now preparing for a roll-out of the service.
“For the next 6-18 months we’re going to be really focussed on leveraging our carrier portal and expand its domain of functionality,” says Delaney.
In the mid- to long-term future, Delaney believes that the success of online solutions will lead to GCS transitioning its offering fully into the cloud. He also predicts that during a three to five year timeframe the company will have experienced revenue growth of anywhere between 500% and 700% and expanded its customer base to every major market in the world.
“Once we get through the MKHD merger all of our revenues and figures will be public for everybody to see,” says Delaney. “The story is great, the momentum is great, and we’re at that inflection point.”
Key Facts: GCS
History: GCS was formed in 2006 by Neal Axelrad and Jay Meranchik. The company’s management team were all former colleagues of the two when they worked at ITXC.
Offices: GCS has offices in New York and New Jersey, US.
Ownership: GCS is privately held but will become public should the merger with Mount Knowledge Holdings go ahead.
CEO: Neal Axelrad is described as a serial entrepreneur and has a background of successfully building and leading a variety of companies in the retail, marketing and telecommunications industries.
Solutions: GCS specialises in management solutions for carriers to help them improve their inter-carrier voice back-office operations. The company’s products include a route manager, rate manager and online carrier portal service. GCS’ Dynamic Management Solutions Suite includes functions covering carrier entity management to rate management, CDR processing and inter-carrier invoicing as well a credit limit management. The company claims to automate 95% of the tasks carriers perform on a daily basis in relation to inter-carrier voice.
Customers: GCS has over 60 wholesale and retail customers including Earthlink, iBasis and KDDI.
