& cplSiteName &

Does Anyone Want Sonus?

Phil Harvey
The Philter
Phil Harvey

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
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.

Phil Harvey
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.
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.

Phil Harvey
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.
User Rank: Light Sabre
2/7/2013 | 7:07:37 PM
re: Does Anyone Want Sonus?

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.

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
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
Friday, September 16, 1:00PM EDT
How to Implement Agile
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments

F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments

Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments

Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments

Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment

As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments

Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments

VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments

Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments

In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments

Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments

How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments

Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
VoLTE Can Drive 4G Small Cells Adoption
Ravi Narayanan, Senior Analyst – Cloud & Next Generation Mobile Networks, Heavy Reading, 8/18/2016
'Most Wanted' Kobi Comes Home
Ray Le Maistre, Editor-in-chief, 8/23/2016
Rocket Fiber Lights Up Detroit With Gigabit
Elizabeth Miller Coyne, Managing Editor, 8/22/2016
Rovi to Close on TiVo September 7
Mari Silbey, Senior Editor, Cable/Video, 8/22/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.