& cplSiteName &

Oracle to Acquire Acme for $1.7B

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

Oracle Corp. opened the week with a US$1.7 billion bang by announcing an agreement to acquire IP networking systems specialist Acme Packet Inc. for $29.25 per share, a 22 percent premium over Acme's closing price Friday of $23.93.

The deal values Acme Packet at $2.1 billion, but Oracle will be shelling out about $1.7 billion once the value of Acme's cash, short-term investments and other assets are taken into account.

The news sent Acme's share price soaring by 22.4 percent to $29.30, slightly above the agreed purchase price.

Acme is the long-term leader in the market for session border controllers (SBCs), which manage IP traffic at the borders of networks (where carrier networks intersect and where carrier networks connect with enterprise networks). It has 1,900 customers and has its technology deployed at 89 of the world's top 100 communication service providers (CSPs).

That technology will become increasingly important in the mobile world as SBCs play a critical role in the IMS (IP Multimedia Subsystem) architecture that's set to be adopted by many major wireless operators as they enable 4G voice services (otherwise known as Voice over LTE) on their networks.

Acme Packet, which just announced revenues of $274.4 million and a net loss of $5.2 million for the full year 2012, is also active in the growing and important market for Diameter signaling controllers. (See Diameter Matters.)

Oracle says it plans to combine Acme's portfolio with the various Service Provider Information Technology (SPIT) capabilities (multiple OSS and BSS products) its Oracle Communications unit already offers to CSPs.

Why this matters
Acme is embedded in the core networks of the world's largest network operators and, with its expertise in SIP voice traffic management and understanding of carrier network developments, is on course to become an even more invaluable supplier as 4G voice services are developed by mobile operators. It's also an important partner for many major equipment and software vendors.

Oracle clearly sees Acme as a way to develop deeper ties with the CSP community and leverage Acme's installed base to introduce its range of software and IT products, especially as cloud service architectures and Big Data analytics strategies take hold in the telecom sector.

It also signals Oracle's entry into the dedicated telecom infrastructure market, prompting the questions of whether this is the first of multiple strategic telecom equipment acquisitions for Oracle and whether it might lead other major IT/software players to follow suit.

The move will likely also affect some of Acme's existing partnerships, especially those with the likes of Hewlett-Packard Co. and IBM Corp..

— Ray Le Maistre, International Managing Editor, Light Reading

(14)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
LR1234
50%
50%
LR1234,
User Rank: Light Beer
2/5/2013 | 12:17:29 AM
re: Oracle to Acquire Acme for $1.7B
I don't know of any service providers or enterprises that are specifically ASKING for Sun/Oracle hardware. Most people are trying to figure out how to get Sun/Oracle OUT of the datacenter. -á

First of all, you look at how Oracle is gouging all of the legacy Sun customers. Why keep Oracle/Sun if you can migrate to something newer and better? You'd have to be a die-hard Larry Ellison fan or a bitter clinger-on to maintain any loyalty at this point.-á

Second of all, apps just perform better on the Intel CPUs. Take an app that runs on Solaris/SPARC. Compile it on a Linux/Intel box. Compare the performance side-by-side. The Linux/Intel app almost always runs much faster (YMMV and depends on if the workload is CPU bound, I/O bound, or whatever).-á
LR1234
50%
50%
LR1234,
User Rank: Light Beer
2/5/2013 | 12:11:36 AM
re: Oracle to Acquire Acme for $1.7B
I don't know much about Acme's offerings (not an SBC guru) but a quick search indicates that at least some of Acme's software runs on Linux. Maybe that's not the case for some of their other stuff, I dunno.

But the people I know in telecom tells me that Linux is where everything is going, if it's not there already, based on the fact that Solaris (licensing) and Oracle hardware (SPARC in particular) are at a price disadvantage.-á

If Acme is already on Linux, would they go back to Solaris and SPARC CPUs? I don't see that, unless Oracle can make sacrifices on the price point, and somehow I don't think Oracle can compete with Intel on those costs.-á

Oracle does have a nice lineup of Intel/AMD servers in both NEBS and non-NEBS categories; that's the only thing I can realistically see them bundling in hardware wise to stay price-competitive-áwith Acme's rivals (And even among Intel/AMD servers, Oracle is not very competitive price-wise).

Solaris on SPARC doesn't go into the "cloud" very well since you need pricey SPARC hardware to do it, if the intent is to use a customer's in-place infrastructure to do it (which would probably be already running VMWare or some other COTS Intel hypervisor). Nobody with any sense is going to deploy a Solaris/SPARC virtualization stack today.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/4/2013 | 11:42:36 PM
re: Oracle to Acquire Acme for $1.7B
Ray,

You can not really go virtual...by that I mean run in a VM of some sort...and then expect to get HW optimization.

seven
Phil Harvey
50%
50%
Phil Harvey,
User Rank: Light Beer
2/4/2013 | 11:14:59 PM
re: Oracle to Acquire Acme for $1.7B
I don't think selling Sun hardware is a big part of the logic for the deal, I was just remarking that it's a nice add-on. ORCL will likely be able to say to customers that they can deliver Acme software on whatever platform suits them GÇö or it can provide one.
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
2/4/2013 | 9:42:53 PM
re: Oracle to Acquire Acme for $1.7B
I think the 'packaging' will be tried but many comms service providers will still have different purchasing decision-makers for traditional Oracle stuff and the deep network tech that Acme has developed -- at least for now. Of course if Oracle/Acme can really get something going with a virtualized session border controller on a Sun server then you have the start of a double-whammy for Oracle, and then, of course, those SUn servers could start to host all sorts of software... BUt I imagine Oracle's biggest challenge will be in getting the RFP/purchase order logistics lined up in a way that will suit a suite (and sweet) sale.
FritzNelson
50%
50%
FritzNelson,
User Rank: Light Beer
2/4/2013 | 9:03:22 PM
re: Oracle to Acquire Acme for $1.7B
Another possibility: Oracle often touts how many telco customers it has. It won't name them, but it's obviously really important to them. Now, with Acme, there are 1900. Even though there is overlap, I imagine that Oracle sees the potential to sell all of them either more Oracle "stuff" or an integrated, all-Oracle approach to even running their own businesses, analyzing customer data and so on. Oracle has done something similar on the cloud front, using some of its acquisitions of smaller cloud players to try to sell broad-based cloud offerings to enterprise customers -- ones that expand from just Taleo (talent management in the cloud) to Fusion apps like ERP.
kingcharles
50%
50%
kingcharles,
User Rank: Lightning
2/4/2013 | 7:01:33 PM
re: Oracle to Acquire Acme for $1.7B
Licence cost will go trough the roof :-(
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
2/4/2013 | 4:36:31 PM
re: Oracle to Acquire Acme for $1.7B
Oracle's a huge business. Even the comms part has quite a bit of diversity. I will be interested to hear from them on the analyst call what their motivations are for this deal.-á-á
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
2/4/2013 | 4:27:28 PM
re: Oracle to Acquire Acme for $1.7B
Good point, Gabe. IMS applications are prime for the network functions virtualization. -á I wonder to what extent Acme's capabilities could be 'optimized' for Oracle hardware?-á
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
2/4/2013 | 4:15:12 PM
re: Oracle to Acquire Acme for $1.7B
Moreover, Acme is further along than many vendors in virtualizing its applications. I'd venture that-áthis is-áa big part of the attraction.
Page 1 / 2   >   >>
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Prepping for the Future: Upskill U Explained
During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (1) comment


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
LRTV Huawei Video Resource Center
European 2020 Digital Agenda

5|12|16   |     |   (0) comments


Anacom's Fatima Barros discusses the plan to bring ultrafast broadband to Portugal by 2020.
Upcoming Live Events
May 24-25, 2016, Austin Convention Center, Austin, TX
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Nokia Plays It Smart With Major Mobile Devices Brand Deal
Iain Morris, News Editor, 5/18/2016
Ingenu Revs Up IoT Rhetoric
Iain Morris, News Editor, 5/18/2016
Intel Wants to Be a 5G Player
Dan Jones, Mobile Editor, 5/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
The Takeover Begins Click Here
It all started when Mittens taught himself how to use the Internet.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.