NetCracker Plays End-to-End Game
The proposed US$449 million acquisition of Convergys Corp. (NYSE: CVG)'s Information Management telecom software business unit will enable NEC Corp. (Tokyo: 6701)'s Service Provider Information Technology (SPIT) subsidiary NetCracker Technology Corp. to mix it up with the telecom software sector's big guns, according to Heavy Reading Senior Analyst Ari Banerjee. (See NEC to Buy Convergys Unit for $449M.)
The SPIT specialist believes the planned acquisition is a good one for NEC/NetCracker and provides Convergys IM with "a safe haven."
And it gives NetCracker the extra muscle to compete with some of the dominant forces in the telecom software sector. Closing the deal would provide NetCracker with "all aspects of BSS/OSS, which will position it very well to compete effectively with the end-to-end BSS/OSS stacks of Oracle Corp. (Nasdaq: ORCL), Amdocs Ltd. (NYSE: DOX) and Ericsson AB (Nasdaq: ERIC)," the analyst says. (See Ericsson + Telcordia: What the Analysts Say and Ericsson to Buy Telcordia.)
Banerjee adds that Convergys has been "looking for buyers for some time now and this will be good for them. There is alignment on business models as both Convergys and NetCracker are solutions/service-based companies, so there is synergy."
The analyst also notes that the Convergys IM business has "not been able to invest adequately into its products for some time now … This will hopefully change under NEC/NetCracker ownership."
— Ray Le Maistre, International Managing Editor, Light Reading