Sonim has raised $18 million and hired in a management team to market its platform, which integrates session initiation protocol (SIP)-based instant messaging software and voice over Internet Protocol (VoIP) compression to replicate Nextel's 'push-to-talk' function.
Apart from the fact that it is captive to the availability of General Packet Radio Services (GPRS) handsets, Sonim still needs to clear a technology hurdle in the shape of a scalable network server, or it risks missing its window of opportunity.
The funding of $18 million from 3i and Apax Partners is the first institutional investment in the Silicon Valley company since its founding two years ago. Both venture capital firms have locked in their stakes by getting Sonim to keep outside investment to a minimum in any future rounds.
Sonim has also gone public with its management team, which was hired in stages since the beginning of the year. The company founders will mostly stay on in engineering roles. John Burns, who was formerly vice president of operations for Acta, took over as chief executive officer in January, but Sonim has only made his appointment public now. Executive vice president of engineering Loga Logarajah has been given the task of ensuring that the company has a commercially deployable carrier server by springtime next year. Logarajah was previously vice president of engineering for Internet Protocol services at Nortel.
Sonim says the funding will suffice as operating capital for two years, independent of any revenue. The company has about 65 employees, with 40 in engineering and the remainder in sales and business development.
The idea of voice-based instant messaging (IM) is hardly new. Back in November 2000, Nuance acquired SpeechFront to create a speech-based interface to IM applications, but the project was subsequently scrapped as Nuance's financial conditions deteriorated. There are also plenty of other startups that mistimed the launch of GPRS networks and fell by the wayside. Others, like Winphoria, have concentrated on the infrastructure side. But in conjunction with dynamicsoft and Telica, Winphoria has been working on similar applications with Sprint PCS, sources tell the451.
Comverse is also talking about voice-based IM, but is approaching the application from a speech recognition and multimodal perspective – hence its involvement in the Speech Applications Language Tags (SALT) Forum. However, because Comverse's expertise in voice over IP is limited, Sonim may even be an appropriate acquisition for it. Cisco, which is thought to be looking for VoIP application providers, could also be interested.
In the 802.11 space, Vocera is already selling a wireless local area nettwork-based IM product.
Sonim has developed client software that relies on an SIP "lite" kernel that resides on the chipset for session management and setup. The IM presence is based on the SIMPLE protocol, an IETF specification for sharing online presence information and instant messages. The terminal device communicates with a server in the carrier network for much of the application functionality. The technology can support real-time communication and store and forward messages with either a single user or a group of users.
The company has done a good job of shrinking the client software, which is crucial given the premium for real estate on terminal device chips and limited processing power. But what has attracted the venture capital firms is Sonim's ability to deliver low-latency voice over IP to the client. Part of that technology relies on real time protocol, which is the Internet standard protocol for the transport of real-time data, including audio and video. But Sonim has developed algorithms that break the packets into efficient frames, and intelligent buffering so that no packets are lost.
So far, the technology has been involved in what Burns describes as "light" or "mini" trials in labs at carriers, which are intended to test the business case. The plan is to have the next iteration of its server available around November and a commercially deployable scalable server by next spring. Here the responsibility lies with engineering vice president Logarajah, who has been working on the problem since March. Sonim won't go into details about the technology, but told the451 that Logarajah's reputation is solid enough that carriers are willing to take his word that the server will be in place – a risky move.
As a first step, Sonim has persuaded several chip vendors – Agere, Intel and Texas Instruments among them – to embed its SIP lite client, with a footprint of about 50 megabits, into their silicon on a royalty-free license basis. Sales of network servers will generate the revenues.
There are two reasons Sonim is confident about its chances. Carriers need applications for GPRS networks to start generating returns on their investment, and they have the example of Nextel's successful DirectConnect 'push-to-talk' application. Nextel has managed to sustain the highest average revenue per user and the lowest churn in the U.S. wireless industry, in large part because of the push-to-talk functionality and despite less coverage and poor customer service, Sonim reckons. Carriers, the argument goes, are intrigued by the possibility of extending the same functionality to a wider audience, beyond Nextel's base of workers in industries like construction and manufacturing. The company has an insurance policy in the form of support for 802.11 networks if GPRS deployments are patchy. Here, the company would compete with Vocera.
the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.