Woody Ritchey, CEO of Billerica, Massachusetts-based Reef Point, has been named CEO of the merged entity, with other management roles being filled by officers from the two companies. NextPoint will be headquartered in Gaithersburg, Maryland, which is where NexTone was based.

Both companies were privately held, but NexTone was the larger with 210 staff and VC funding of around $100m, while Reef Point had 85 employees, had raised some $50m, and was still pre-revenue. All staff are to be retained, and NextPoint has raised an additional $20m from existing investors to finance further development and expansion of partner programs.

Reef Point already has Alcatel-Lucent, Samsung, and, from yesterday, Chinese vendor ZTE as partners. ZTE is selling what is now called the NextPoint Femtocell Gateway along with its own femtocells. Other systems integrators and equipment vendors will follow, said Ritchey. NexTone has until now followed an entirely direct sales model, so the expectation is that the two product lines will now be sold in both routes to market.

Product integration between NexTone and Reef Point had already begun even before the merger. The two announced at last month’s VON show in Boston an Integrated Border Gateway product combining Reef Point’s Unified Convergence Gateway technology with a NexTone SBC to offer fixed-mobile convergence with IP session control. The IBG will ship in the first quarter of 2008.

However, Ritchey said both discrete product lines are to be maintained. These comprise the UCG portfolio from Reef Point, and from NexTone, its SBC, the Multiprotocol Session Exchange for interconnecting SIP and H.323 networks and the Real-Time Session Manager for controlling all its devices in the core of the carrier network.

In terms of the competitive landscape, Ritchey said Reef Point traditionally comes up against the likes of Airvana, Azaire, and Netrake (now part of Audio Codes), all of which offer gateway products to service providers that enable them to offer converged services by sitting at the edge of their networks, rather than on customer premises.

Meanwhile, NexTone claimed the number-two spot in SBC behind Acme Packet, which NextPoint considers to be its primary competitor, with the difference that Acme can’t do mobile, according to the CEO.

Our View

The formation of raises the question whether standalone SBCs can continue as a market in their own right, or be bundled into broader offerings. Indeed, will Acme feel compelled to follow NexTone’s example and get some FMC technology into its portfolio for a like offering to the IBG?

This is all about carrier FMC, of course, which is why it fits so well with femtocells. A completely different set of vendors such as DiVitas and BridgePort offer what might be called DIY FMC, in that an enterprise can acquire the technology, deploy it on its network and manage the convergence internally, though it’s too soon to say which business model will prevail, or whether both will enjoy a modicum of success. There are certainly carriers interested in offering FMC, and at least some of the larger and savvier enterprises might be tempted to go down the DIY route, having the resources at their disposal for such an undertaking.