Light Reading

Is Acme a Virtual Gain for Oracle?

Ray Le Maistre
2/4/2013
50%
50%

Oracle Corp.'s plan to acquire session border controller (SBC) specialist Acme Packet Inc. looks like a way for the software giant to get some ready-made smarts in the key telco sectors of 4G packet core networking and network functions virtualization (NFV), according to industry analysts. (See Oracle to Acquire Acme for $1.7B.)

But the move, which is yet another example of encroachment by a major IT company into traditional telecom turf, will also shake up the competitive environment and put some industry relationships under strain, says the experts.

Packet core competencies
As mobile operators migrate toward the all-IP networking environments of 4G/LTE, so the capabilities they need in the intelligent core of their networks (where voice and data traffic is identified, analyzed and managed) are changing. Acme Packet has some of the key technologies mobile operators will need in their all-IP architectures, especially as traditional circuit-switched voice traffic disappears and mobile "calls" become real-time packet interactions.

"Acme Packet is well positioned in real-time IP-based communication services," says Heavy Reading senior analyst Gabriel Brown. "On the mobile side, it has a big opportunity in IMS-based Voice over LTE [VoLTE or 4G Voice], and that is only one of several potentially large markets for real-time services."

Brown notes that Oracle believes Acme Packet's potential spreads far beyond the telecom sector. The acquisition announcement "talks about healthcare, security, and commerce, so clearly Oracle sees Acme's technology as being applicable to a broad range of applications and markets. [Acme] also has a decent play in so-called Operator OTT [over-the-top service management], should that emerge as a significant source of revenue," he adds. "Oracle has, for some time, wanted a bigger presence in the 4G core, so the deal fits on that score. Buying a segment market leader has much to recommend it."

Let's get virtual
Acme Packet is also one of the IP networking specialists that has been exploring ways in which its products can be offered as software and integrated into networks that, in common parlance, are "software-defined" or "virtualized."

"Acme Packet is further along in virtualizing its 4G core products than many other vendors," notes Heavy Reading's Brown. "It'll be interesting to see how Oracle drives this idea of software-centric networking and hardware independence, as is being pursued across the industry in the Network Functions Virtualization [NFV] work." (See Carriers Peer Into Virtual World.)

Brown's Heavy Reading colleague, Ari Banerjee, agrees that the deal gives Oracle opportunities in the NFV space. "This will enhance Oracle's SDP [service delivery platform] strategy and allow it to jump into SDN" as it will be able to house "Acme Packet technology on Sun platforms in a virtualized hypervisor environment."

Positive for Acme, a natural step for Oracle
Infonetics Research Inc. principal analyst Diane Myers believes this is a good time for Acme Packet to find a new home. "The competition for session border controllers within the service provider and enterprise space has been heating up and being a standalone product specialist becomes more challenging," she states.

And it makes sense for Oracle, though it alters the industry dynamics somewhat, notes Myers. Buying a network vendor "is a natural extension of [Oracle's] work on the service delivery layer. It will, however, put it in closer competition with many of its network partners. It was expected that Oracle would make a push into network equipment at some point in 2013."

Competitive tension
That potential for competitive tension is exacerbated by the growing interest among major communication service providers in virtualization, but it's also a good way for Oracle to kick back at the networking giants such as Cisco Systems Inc. and Ericsson AB that are invading the IT space and making big noises in the NFV and SDN arenas, believes Heavy Reading's Caroline Chappell.

"This is the start of the fight-back of the IT vendors against Cisco et al moving into the Service Provider Information Technology (SPIT) space with cloud management and OSS acquisitions and talking about becoming software and services companies." (See Cisco Extends Its SDN & Cloud Plans and Ericsson to Buy Telcordia.)

Chappell adds: "The network equipment providers were scenting the advantage [in virtualized networks] as NFV requires deep knowledge of the network, but Oracle is beginning to even up the playing field by buying a heavyweight networking company and it's also one that strengthens its SIP server, charging and policy control business," she notes.

Having a foot in both the networks and SPIT camps is a must for major vendors now, notes Ovum Ltd. principal analyst Dana Cooperson in emailed comments issued to trade journalists. "Telecom and IT are coming together in ways that are shifting the vendor competitive framework significantly. ... Companies that specialize in either telecom or IT will need a strategy of how they will benefit from this blending of what were two largely separate domains. Any vendor that wants to be a full-service partner to the telcos and other large communications and content providers will need such a blended strategy to be credible. Specialists will need to align with full-service partners."

And Cooperson expects further strategic acquisitions. "Oracle has a comparatively large bucket of cash to use for acquisitions," with only Cisco among the infrastructure vendors boasting greater M&A muscle, she notes. "Oracle and Cisco can both afford to be aggressive with M&A whereas many of their peers cannot. Expect the buying spree to continue."

-- Ray Le Maistre, International Managing Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
victorblake
50%
50%
victorblake,
User Rank: Lightning
2/5/2013 | 3:28:06 PM
re: Is Acme a Virtual Gain for Oracle?
Train engine (Acme) meet passenger car (Oracle); passenger car -- meet train. I think you two go well together. When the transport technology (IP and below) matures to the point it has, the new traffic cops are application routers, of which Acme's product is a pre-eminent example. Huge synergies are possible. I'm sure most of the other telecom system vendors won't like it though.

Moves like this are likely to force another major player (at some point in the future) to take MySQL and build a system product and services around it in the same way that Red Hat (and perhaps others) have for Linux.

I wouldn't be surprised to see Cisco Systems some day take the plunge into big data and the cloud by building or acquiring a layered product and services on top of MySQL to compete.
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
2/5/2013 | 2:35:42 PM
re: Is Acme a Virtual Gain for Oracle?
There's another intriguing angle identified by my friends at BillingViews, that this deal could be part of Oracle's telecom Big Data efforts -- the raw data that could be extracted from SBCs and Diameter signalling routers and utilized by analytics engines could prove valuable to Oracle.-á

Check out-áhttp://www.billingviews.com/or...-á-á
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Huawei Video Resource Center
Huawei's Power Play With GrupoGiro

4|1|15   |   2:51   |   (0) comments


Daniel Heredia, CEO of Energiro, the power management services part of Spain's Grupo Giro, explains why his company has just struck a partnership with Huawei for uninterruptible power supply products and how he hopes it can take the partnership into other markets.
LRTV Huawei Video Resource Center
Huawei Intros Smart Device for eLTE

3|30|15   |   05:25   |   (0) comments


Huawei has developed a secure, location-aware multimedia smartphone for its eLTE trunked radio solution, says Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Win Video, Win All

3|30|15   |   06:44   |   (0) comments


Video is going to be the next main source of revenue for operators. Operators have big opportunities and advantages to monetize video services. Globally, Huawei has helped more than 70 operators achieve over 30 million video subscribers. Watch this video for more.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
More and more traffic is traveling within data centers, and operators need new networking approaches to manage this growth. Pica8's infographic shows how operators can confidently and painlessly deploy white box switches into existing networks today and leverage the benefits of SDN.
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
Just Don't Say IBM Is 'Relaunching' Networking Business
Mitch Wagner, West Coast Bureau Chief, Light Reading, 3/26/2015
TV Everywhere Nears Mainstream Adoption
Mari Silbey, Independent Technology Editor, 3/27/2015
Carriers Are Bright Spot in BlackBerry Q4
Sarah Thomas, Editorial Operations Director, 3/27/2015
Comcast Says TWC Deal Will Close Later
Mari Silbey, Independent Technology Editor, 3/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.