Avaya Acquires IP Phone Software Vendor Nimcat

The communications provider plans to create products using Nimcat's smart-phone software for enterprise VOIP.

Business communications systems provider Avaya Inc. announced Tuesday that it has acquired privately held Nimcat Networks, a maker of smart-phone software embedded in enterprise VOIP phones.

The transaction was made for approximately $39.3 million in cash.

Ottawa-based Nimcat Networks Inc.s "secret sauce" is the patented NimX, software that allows users to build localized VOIP (voice over IP) point-to-point networks with traditional PBX features—without the PBX.

NimX, based on the industry standard SIP (Session Initiation Protocol), allows each handset or device to automatically discover all the other units on a network in a few seconds.

The communications intelligence is embedded directly in the endpoints rather than in the Ethernet network.

Users will have PBX-like features such as dialing by name, switching, auto attendant, directory, transferring and voice mail all on each VOIP phone, without using a server.

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Click here to read more about Avayas IP telephony strategy.

Data exchanged on the local network, such as voice mail, can be backed up on various phones, in case one of the phones is lost or damaged.

For example, voice mail left for a disconnected phone can be stored on a neighboring phone and made retrievable through that phone or remotely.

When the phone gets reconnected, it can automatically download its mail from the networked neighbor.

Saied Seghatoleslami, Avaya Inc.s vice president of product development in the Communications Appliances Division, told Ziff Davis Internet that the acquisition means that "there are no getting started costs [for Avaya]. There are no installment costs and no new servers to build. This software is plug-and-play [by the user or local admin] through the local network. Any PC guy can load it; there is no telecom training necessary."

All that is required for installation is to plug the IP phones into the same data network used by office personal computers, Avaya said. The phones automatically find each other, connect to each other and initialize their features, and adding users is as simple as plugging another phone into the network, the company said.

Analyst Steve Raab of the DellOro Group told Ziff Davis Internet, "SMBs need two main things in their phone systems: low complexity and low cost. From an installation and management standpoint, NimX phones seem to fill the need. But theyre designed for a sweet spot of 10 or fewer people. You wouldnt buy this if you had a business or office with 20, 30 or more users in it. The power over Ethernet and quality of service wouldnt be enough."

Raab added, "Theres a lot of new competition in the low-end key-system phone market. The hardware makers are under a lot of price pressure lately because of new alternatives [coming into the space]. Many of the traditional phone systems are too heavy for small businesses, so the smaller, point-to-point Ethernet LAN might be something for them to consider."

Earlier this year, Aastra Technologies Ltd released an office phone running NimX software and retailing for $325 to $375 apiece.

The phones, which resemble typical IP screen phones, have all the features mentioned above that normally run on a central PBX—whether IP or traditional TDM.

"By joining Avaya, Nimcat Networks will have access to a larger market and we become contributors to Avayas global research and product development efforts," Nimcat CEO Mahshad Koohgoli said. "Our technology will play an integral role in further innovations from Avaya."

Read more here about Nimcat Networks and its PBX-replacing software for SMBs.

Avaya said it expects the acquisition to be one cent dilutive in the companys fourth fiscal quarter, primarily related to approximately $3.2 million of in-process research and development costs. Research and development plans include incorporating Nimcat Networks software into Avaya IP telephony offers.

This process is expected to take up to one year, after which Avaya will release its first integrated Nimcat Networks-based product.

Avaya said Nimcat Networks will become part of its Global Communications Solutions group, and that it expects to continue selling Nimcat Networks software to other equipment manufacturers and to support existing Nimcat Networks customers.

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