Light Reading
Analysts believe Acme Packet will give Oracle some street smarts in the mobile packet core and network functions virtualization/software-defined networking sectors

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
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (1) comment


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
LRTV Documentaries
AT&T's New Security Strategy

12|10|14   |   02:36   |   (1) comment


AT&T's Chief Security Officer Ed Amoroso explains how his company is wrapping virtual security layers around micro network domains.
LRTV Documentaries
2020 Vision: A First View

12|9|14   |   02:25   |   (3) comments


At the 2020 Vision Executive Summit in Iceland, unique Heavy Reading research shows that comms service providers are optimistic about the next five or so years.
Upcoming Live Events
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
Vodafone to Ride T-Mobile Back Into US
Dan Jones, Mobile Editor, 12/12/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
Gardner's Departure a Cautionary Tale
Carol Wilson, Editor-at-large, 12/12/2014
Cisco Makes Big Analytics Push
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/11/2014
Like Us on Facebook
Twitter Feed
Webinar Archive