Light Reading

Does Anyone Want Sonus?

Phil Harvey
The Philter
Phil Harvey
2/6/2013
50%
50%

Now that Oracle Corp. is buying session border controller vendor Acme Packet Inc., what happens to Sonus Networks Inc.? Is Sonus now a target itself by a larger company like Cisco Systems Inc.? The theory is out there, but at least one analyst says Cisco's pretty well set without Sonus's help. In a note to clients this week, Northland Capital Markets analyst Catharine Trebnick wrote:

    We don't believe Cisco will move to acquire Sonus Networks at this time. Why? Cisco has an enterprise SBC (CUBE) which has been gaining acceptance in the enterprise segment. According to Infonetics, in 1H'12 Cisco's enterprise SBC market share jumped to 26 percent, up 3 points Y/Y. On the carrier side, the ASR 5000 has had SBC capabilities since Cisco acquired Starent back in Oct. 2009.
What about other competitors? Perhaps they'll be able to pick off a little of Acme's market share while its execs are picking out Corvettes. For more:
— Phil Harvey, Editor-in-Chief, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/8/2013 | 5:36:12 PM
re: Does Anyone Want Sonus?
One of my bosses described a Telecom Equipment model that became more like the Aircraft industry. -áIn both cases, there are a limited number of regulated customers and there were too many suppliers. -áHis take was that there would be many fewer major suppliers and a moderate number of smaller specialists (Think of Boeing and Bombardier or Cessna). -á

I have agreed with that model and companies like Sonus have to be a specialist. -áThey simply don't have the scale to get there. -áIf they want to sell the business, then they need to be at the bleeding edge of a new wave. -áThere are ways to structure R&D to get there, but you won't get there without risk.

seven
Phil Harvey
50%
50%
Phil Harvey,
User Rank: Light Beer
2/8/2013 | 3:54:14 PM
re: Does Anyone Want Sonus?
-áYes, I can see that Sonus would have to do quite a bit to prime itself for a breakup. And, of course, my original piece was just to address the market speculation. When folks see one M&A deal, they always expect others to follow soon.

In this case I'm not so sure. Consolidation is still needed in a few telco infra areas but there's also a good argument to be made that network specialists can react more quickly to customers and be more nimble. So maybe the whole world won't end up working for Cisco after all.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/8/2013 | 3:20:43 PM
re: Does Anyone Want Sonus?
You should be able to detect a break up. -áThere can be value in that but Sonus (if they really think this is a good idea) would take steps to make it happen. -áIn such a move, they would make the company more modular so untangling it would be easier. -áHaving experienced a very tangled acquisition it would make things a lot easier to do.

seven
Phil Harvey
50%
50%
Phil Harvey,
User Rank: Light Beer
2/7/2013 | 10:25:04 PM
re: Does Anyone Want Sonus?
-áOr we could split it up -- Genband takes the VOIP infra and Ericsson takes the SBC software and such.

Alcatel-Lucent could sell its enterprise unit to a private equity firm, which could then add some or all of Sonus.

There are a lot of ways this could happen. Most interesting, though, is to see companies that aren't traditional telecom infra providers (like Oracle) getting bigger, faster in this space.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/7/2013 | 7:07:37 PM
re: Does Anyone Want Sonus?
Phil,

The way to answer your question is this:

What does Sonus have that other companies might want?
Who might have the capital to pull off that kind of acquisition?
Who in a similar space or adjacent space?

In the first question, one identifies the assets that an acquirer would want. -áFrom there, the list gets narrowed by getting down to the possible acquirers. -áThe market cap is $760M and enterprise value is about $480M. -áSo, let's say you get 2x EV + 1x (MC-EV) for a value of about $1.2B.

So....who could throw around $1.2B and wants into the SBC/VoIP Carrier space?

That would narrow it down.

seven
More Blogs from The Philter
There's an interesting tension between how much SDN can benefit service providers and how it could threaten their established businesses
Stanford's Nick McKeown says SDN won't take hold until networking equipment vendors give up some control
OneAPI may provide developers a reason to build apps and content for networks, not just mobile operating systems
Ericsson CEO Hans Vestberg defends his company's managed services deals and says he'd rather invest in R&D than make expensive acquisitions
Use our message boards to share photos from your Barcelona experience this week
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
LRTV Custom TV
DOCSIS 3.1: Transforming Cable From Hardware-Defined Network to Software-Defined Network

4|29|15   |   03:48   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explains how DOCSIS 3.1 can transform cable HFC network to a more agile software-defined network.
LRTV Huawei Video Resource Center
Predicting Traffic Patterns for Quality Mobile Broadband

4|29|15   |   6:45   |   (0) comments


Accessing information ubiquitously creates complexity and creates heavy traffic onto the network, especially at large-scale events like sporting events or festivals. In this video, Huawei's Mohammad Hussain speaks to experts about how to predict traffic and improve user experience during periods of heavy traffic.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network functions virtualization (NFV) is not the easiest of topics to take on board, so here's a Light Reading infographic, developed following conversations with the folks at HP, that helps make sense of where NFV is taking the industry.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Verizon Saves 60% Swapping Copper for Fiber
Sarah Thomas, Editorial Operations Director, 5/19/2015
Choosing a Technology Supplier? Consider Changing Your Selection Criteria
Steve Saunders, CEO and founder, Light Reading, 5/18/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Chattanooga Charts Killer Gigabit Apps
Mari Silbey, Senior Editor, Cable/Video, 5/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
My ongoing interview tour of the leading minds of the telecom industry recently took me to Richardson, Texas, where I met with Rod Naphan, CTO and SVP, Solutions, ...
I recently popped down to Texas to chat with CEO Eric L. Pratt about his company, Taqua.
Cats with Phones