The alliance puts the muscle of Digital's industry-leading telecom systems integration business--with more than 2,600 staff--behind software developer VocalTec, the pioneer of voice communications over the Internet.
No financial terms were disclosed.
Digital will now be able to sell and install VocalTec software products, first in the United States and Europe, then later in other worldwide locations. VocalTec software combines once-separate voice and data networks into one large network that can handle both information types by using the IP (Internet protocol) standard.
In addition, the pact calls for Digital to integrate VocalTec software into existing phone networks to permit such functions as overall systems management, customer billing, and so-called intelligent network features such as call waiting.
Right now, corporations and telephone companies rely on proprietary hardware and software as the basis for the networks that route calls to their destination. But a move to IP-based telephony products is gathering momentum as companies and telcos look to save money and make communications system management easier by combining their voice and data networks.
While considered a leader in IP telephony products, analysts say that prior to the deal with Digital, VocalTec was lacking the large sales and installation force competitors have, including Lucent and Cisco.
"[Partnering with Digital] is very critical for VocalTec if it wants to play in the same game" as Lucent and Cisco, said Daniel Briere, president of TeleChoice, a communications consultancy. "They have to have arrangements like this to ensure that [their products are installed] in carrier class networks," he said.
In the last six months, VocalTec has announced and begun shipping a set of sophisticated "gateway" products that translate voice conversations into Internet data along with the control software necessary to centrally manage such networks.
Executives at the two companies said VocalTec-based Internet systems are undergoing pilot testing at major carriers in the United States and overseas and by newer players building entirely Internet-based communications networks.
However, developments in this area are lagging behind the race by phone carriers to build new Internet networks, which was fueled earlier this week by Sprint's announcement that it will move to an integrated Internet voice and data network.
VocalTec, based in Herzliya, Israel, has 235 employees, with roughly 170 of them active in research and development. Net sales in 1997 amounted to $16 million.