& cplSiteName &

Who Will Buy Intune Networks?

Ray Le Maistre
3/10/2014
50%
50%

Many optical networking questions will be posed this week during the OFC event in San Francisco, but here's one that isn't about 400G, colorless ROADMs or the derivation of the show floor coffee: Who's going to buy optical burst pioneer Intune Networks ?

An instant response to that question might reasonably be, "What are you talking about?"

Well, Irish optical transport technology developer Intune has been around since 1999, when it was founded by John Dunne (the current CTO) and Tom Farrell (the current Chief Scientist). It has raised more than $100 million and for years has been agonizingly close to the kind of major breakthrough that would help secure its longevity.

But despite a number of trials and engagements with major operators, the much hoped-for big order never arrived and Intune's backers decided in late 2013 not to pitch in another round of cash. As a result, Intune went into receivership (where a third party is appointed to run the company's finances) in December 2013 and made the majority of its staff redundant, leaving it with a headcount of about 40.

This isn't the end for Intune, though. While some of its backers decided against further funding, two of them, International Investment and Underwriting (IIU) and Kernel Capital, decided to provide working funds while the company continues to support ongoing trials and deployments -- including the Exemplar network in Ireland -- and seeks what Chief Marketing Officer Richard Brandon calls "a form of investment or acquisition… an acquisition is more likely," he told Light Reading recently. (See Exemplar Trial Network Unveiled.)

Why would anyone buy Intune?
Good question.

The answer lies in a combination of hot technology developments and compelling competitive dynamics.

On the technology front, it's just possible that this 15-year-old company has finally come of age. The technology it has been fine-tuning for years, most recently in collaboration with Tier 1 operators, is known historically as optical burst switching (OBS). OBS enables a more efficient use of network capacity through the dynamic provisioning of subwavelength capacity, a capability in part enabled by the separation of the data plane and control plane.

Separation of the data and control planes, you say? Indeed -- the very same approach as SDN, as we have pointed out before. (See Intune Waxes Lyrical Over Metro SDN and Defining SDN & NFV.)

And earlier this year, Intune announced that it had added an open interface to its iVX8000 platform "that allows external standards-based controllers to populate the forwarding fabric of the system." That move, believes, Intune, makes the iVX8000 the first "distributed switch which is capable of extending Software Defined Networks (SDN) across hundreds of miles."

This SDN-related legacy is why Intune has been attracting attention in recent years and, according to Heavy Reading senior analyst Sterling Perrin, continues to do so. "It's not just an academic experiment -- a lot of work has been done with Tier 1 carriers so there's a lot of value in Intune and there's a lot of support for this technology [OBS] in the labs of those Tier 1 operators. It's not in the market's interest to let this company die -- if there was nothing in this, it would have died with Matisse Networks," noted the analyst. (See Rumor: Has Matisse's Optical Burst Gone Bust?)

"Intune and OBS technology have always had a lot of interest from the advanced technology groups of major carriers. BT, through the Exemplar project, Telefónica, Telstra, and Verizon have all been supporters of Intune and OBS," said Perrin.

Indeed, Intune was identified by Telefónica SA (NYSE: TEF) global CTO Enrique Blanco, during a briefing with Light Reading in Madrid, as one of a number of vendors helping the Spanish giant migrate towards SDN and NFV. (See Telefónica Unveils Aggressive NFV Plans.)

"I am a bit surprised Intune ran out of money as I thought the Irish government would support it through what is obviously a very long cycle from advanced research groups to commercial product phases within large operators," continued Perrin.

"Someone should buy them," said Perrin, noting that now is the perfect time to step in when "the price will probably be quite low."

So who should buy Intune?
Another good question -- you're on a roll!

There are a few hot favorites, namely Ciena Corp. (NYSE: CIEN) and Ericsson AB (Nasdaq: ERIC). Here's why.

We've already established that OBS is a hot technology that is coming into its prime with the combination of greater pressure on the capacity of data networks and increasing interest in SDN. And it would take years to develop an OBS solution from scratch, so buying Intune (especially on the cheap) would be a quick and easy way into a small but potentially very interesting market.

And it is small. The only other company with OBS in development other than Intune is Huawei Technologies Co. Ltd. (See Huawei Strives for Optical Respect.)

"Huawei is the only other investor in this technology and that will probably scare the others," notes Perrin. "I believe there is still interest in what Intune has built and some large equipment supplier will ultimately buy the assets."

It's possible, then, that Alcatel-Lucent (NYSE: ALU) might be interested but it has its hands full currently, trying to offload units rather than add to its pile. (See Alcatel-Lucent Shifts Up a Gear to End 2013.)

Infinera Corp. (Nasdaq: INFN) is another possibility, while Huawei might even try to corner the market by acquiring Intune, though that would cause particular problems at Verizon, where Huawei is excluded from involvement as it has been deemed to be a security risk by the US authorities. (See US vs Huawei/ZTE: The Verdict.)

Ericsson, though, is believed to have already made enquiries about Intune, though the Swedish company, which has also been involved in the development of the Irish Exemplar network that is built around Intune's metro transport technology, has declined to comment on such speculation.

Ciena, meanwhile, could easily afford Intune, and is already in a strong position with Verizon and could strengthen that engagement further if it had OBS and Intune in its ranks. In addition, the current CEO of Intune, Arthur Smith, is a former Ciena man and would be in a prime position to liaise with his former boss, Ciena CEO Gary Smith.

Ciena has also declined to comment on any discussions with Intune.

Ciena and Ericsson, of course, are now optical transport and SDN bosom buddies, which puts the potential for a joint bid, or a bid at least supported by both parties, a real possibility. (See Ciena, Ericsson Embark on SDN, Optical Love Affair and Ericsson's Ciena Tieup: It's a Migration Thing.)

Something needs to happen soon, though, as IIU and Kernel won't keep shelling out forever. And like Perrin says, it's not in the market's interests to let Intune go under.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/10/2014 | 10:42:12 PM
Re: In for the long haul...
Intune sounds like a good match for Infinera in part because Infinera has never been afraid of being out there on the bleeding edge. Infinera might have the patience and long-range vision to make it work, and it also hasn't been on a real acquisition binge in years--it must have some wherewithal to do this kind of deal.
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
3/10/2014 | 11:11:23 AM
Re: Yet on the People Level
Google - that's an interesting thought!

Or maybe Google might 'suggest' to one of its friends, such as BTI, that Intune miht be worth having...
smkinoshita
100%
0%
smkinoshita,
User Rank: Light Sabre
3/10/2014 | 10:52:01 AM
Re: Yet on the People Level
@Jessie Morrow:  I was thinking the same thing, but there's a lot of roads that lead to the position Intune is in currently.  Sometimes people are really focused on the technology but not enough on the business side of things. 

Did anyone else expect to see Google on the list of possible buyers?  Not for any reason other than it just seemed a bit Google-like to buy something with potential at random for some long-off future plan.
Jessie Morrow
50%
50%
Jessie Morrow,
User Rank: Lightning
3/10/2014 | 8:49:32 AM
Yet on the People Level
Who cannot but wish the best for Intune after reading this article yet on the other hand on another level we hear of a company that is having difficulty in meeting its payroll, to real people not a bevy of anonymous techworkers. Someone then asks the question why and how things were allowed to get to this nasty level, it certainly does not reflect well on those in charge. ( See: Cantillon: No Chrismas cheer for reduntant Intune workers )
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
3/10/2014 | 7:09:05 AM
In for the long haul...
It's good to see the founders still at Intune after 15 years and still believing in the vision and, having met Dunne over the years and been struck by his integrity and passion, I do hope Intune has an extended life as it really appears to have soemthing of worth for the industry.

The next time we report on Intune I hope it's to say that an acquisition or investment has been agreed and that the company can head towards its 20th anniversary.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
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 Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
LRTV Documentaries
China Moves Towards Mixed Ownership of Telcos

2|1|17   |   01:10   |   (0) comments


Chinese authorities are promoting new ownership models in order to raise capital.
Shades of Ray
What to Expect at MWC 2017

1|31|17   |     |   (0) comments


5G is set to dominate as the key buzz term at this year's Mobile World Congress but there are other pressing 4G matters to address.
Telecom Innovators Video Showcase
Versa: A Lot More Than SD-WAN

1|31|17   |     |   (0) comments


Kelly Ahuja, the new CEO of Versa Networks, speaks with Steve Saunders of Light Reading about how Versa offers much more than just SD-WAN, and its plan to grow market adoption in 2017.
LRTV Documentaries
Facebook Gets Physical With Its Security Strategy

1|31|17   |   00:48   |   (0) comments


Facebook has introduced new measures that will enable users to secure access to their accounts using a physical 'key' application.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
T-Mobile CEO: M&A Coming but Not Quite Yet
Dan Jones, Mobile Editor, 2/14/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
WiCipedia: Fintech Flexibility, Snap Missteps & Women of Wearables
Eryn Leavens, Special Features & Copy Editor, 2/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.