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December 23, 2021
Fresh off its $28.3 billion deal to buy health care data and analytics company Cerner Corp., Oracle Communications is dipping into the well again to acquire Federos, a small service assurance firm.
Federos, a privately held company with about 50 employees based in Frisco, Texas, specializes in AI-optimized assurance, analytics and automation solutions. Specifically, Federos says its Assure1 unified platform provides visibility into events and network performance, AI-driven actionable insights and overall service management for modern networks.
No financial details of the deal were released by the two companies.
In a press release, Oracle said the deal, announced earlier this week, will extend its "application portfolio by adding AI-optimized assurance, analytics, and automation solutions to manage the availability and performance of critical networks and systems." The database software and technology giant claimed the pact will expand its "ability to deliver end-to-end network and service assurance, enabling communication service providers and enterprises to increase operational efficiency while significantly lowering costs and reducing customer churn."
Assuring one and all
In an open letter to Oracle's customers and partners, Jason Rutherford, senior vice president and general manager of Oracle's Applications Global Business Unit, added that "the inclusion of Federos’ Assure1 platform into Oracle’s Service and Network Orchestration portfolio will enable Oracle to offer our customers an enhanced operations automation solution to design, configure, monitor, and manage next-generation networks. The combined portfolio delivers robust orchestration capabilities to fulfill and assure rich communications services, including 5G."
Analyst James Crawshaw, practice leader for service provider transformation at Omdia, a sister company of Light Reading, said Oracle sought Federos "to complement its orchestration offering" and round out its communications applications business (BSS/OSS) unit. He estimates that Oracle probably spent less than $20 million, or what he calls "chump-change," on Federos, which generated estimated revenue of $10 million last year.
Crawshaw notes that Federos’ existing partners include VMWare and ServiceNow. Its most recent customer win was EWE Tel, a German telco with about 700,000 customers.
Federos has several major enterprise customers, including Oracle. Besides EWE Tel, its telco customers include Digicel, Eir, GCI, Manx Telecom, Tata Communications, Tele2 and Three Group. In August, the company announced that it had achieved three-year revenue growth of 107%.
Crawshaw speculates that Oracle may have turned to Federos after first approaching MYCOM OSI, a much larger, stronger service assurance player with whom Oracle also has an existing partnership. If that scenario is true, he figures that MYCOM OSI was likely too costly for Oracle's taste. "We imagine Oracle approached MYCOM’s private equity owners but the price was out of Oracle’s communication business unit budget," he concluded. [Ed. note: We've embedded Crawshaw's remarks below, if you'd like to read them in full.]
— Alan Breznick, Cable/Video Practice Leader, Light Reading
Analysis from Omdia's James Crawshaw, posted on LinkedIn:
Cable/Video Practice Leader, Light Reading
Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.
As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.
Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.
He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.
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