Vertical Communications, Inc. develops, markets and sells business phone systems - also known as private branch exchange systems (PBXs and IP-PBXs), communications application software, hardware and associated services. We sell our products to business customers through a network of distributors, systems integrators, and independent telephony and data resellers. Most of our end user customers rely upon resellers or systems integrators to implement our products, and these resellers and systems integrators can significantly influence our customers' purchasing decisions. We market and sell our products in the United States, Europe and Latin America. We also have distributor relationships in Africa, Asia, Australia and the Middle East.

Vertical brings value to our customers through our focus on the specific needs of their businesses. We sell our products to businesses of all sizes and types, with specific focus on small and medium-sized businesses (SMBs) up to 500 users per site as well as large, distributed enterprises (LDEs) up to several thousand sites in a given organization. As our name implies, we also focus on the communications requirements of these organizations by vertical segment, including retail, restaurant, financial services, healthcare, legal, real estate and professional services. Vertical's value proposition to these end customers is composed of providing cost-effective, application-rich, flexible and easy to deploy telephony systems as well as investment protection and a strong migration path from traditional legacy systems to next generation IP and application-rich systems. We believe that an ongoing, fundamental shift in the telephony system marketplace centered around a technology shift to Internet Protocol (IP) based communications and the resulting opportunity to provide higher-value-add communications solutions to customers continues to create significant opportunities for next-generation telecommunications companies like Vertical and will fuel the trend for migration to IP-base systems in our customer base and channels, and provide incremental revenue growth opportunities for our business. According to Infonetics Research, an international market research and consulting firm covering the data networking and telecommunications industries, the IP-PBX telephony market is projected to grow by 10% annually to more than $9.1 billion by 2008.