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Ericsson Adds Automation Smarts With CENX Acquisition

Jeff Baumgartner

Looking to bolster its automation capabilities amid the industry's move to 5G networks, Ericsson announced Tuesday that it had struck a deal to acquire CENX, a company in which it already held a small stake.

Financial terms weren't announced, but Ericsson AB (Nasdaq: ERIC) said the deal is for 100% of shares in CENX Inc. and that about 185 CENX employees will be joining Ericsson.

Ericsson said the addition of CENX's vendor-agnostic service assurance and closed-loop automation capabilities will beef up its OSS portfolio and will factor into its 5G activities as operators move ahead with virtualization and aims to automate and orchestrate slices of those networks.

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Founded in 2009 and originally led by MEF President Nan Chen, CENX was initially thought to be an acronym for Carrier Ethernet Network eXchange. (See Nan Chen Takes CENX Route.)

We were close. The company's name stood for Carrier Ethernet Neutral Exchange, and it was focused on providing a common ground for carriers to hook to one another's networks, as is done in voice networks and the Internet. (See Ethernet Gets a CENX View.)

In 2014, the company pivoted its business model to one of operating that carrier neutral Ethernet exchange, which the industry felt rather neutral about, to offering a service orchestration platform. (See CENX Reinvents Itself as Service Orchestrator.)

Prior to that pivot, in 2012, Ericsson and Verizon Ventures both invested in the company under its old business model. CENX has raised about $22 million, according to Crunchbase. (See CENX Gets Ericsson on Its Side and Verizon Backs CENX With Cash.)

The Jersey City, N.J.-based company appointed its current CEO, Ed Kennedy, a little more than a year ago. (See CENX Names Industry Veteran Kennedy CEO.)

Chen serves as executive vice chairman, a post which allows him to wear whatever color socks he likes.

Among its customers, Verizon Communications Inc. (NYSE: VZ) is using CENX's software to provide a unified view of the service provider's physical and virtual components across multiple systems and data centers.

"This looks like a great exit for CENX. They proved themselves at Verizon and Ericsson will now be able to leverage the solution across its established customer base," said Heavy Reading Senior Analyst James Crawshaw. "Ericsson never admitted to having a gap in its service assurance portfolio so I can't claim I saw this coming. I think it will provide some solace to the large number of other small, independent service assurance specialists that they too might be acquired by one of the big network equipment vendors."

Last May as part of its Leading Lights awards program, Light Reading named CENX as the winner in the "Outstanding Digital Enablement Vendor" category. (See Leading Lights 2017: The Winners.)

— Jeff Baumgartner, Senior Editor, Light Reading; and Phil Harvey, US News Editor, Light Reading

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9/4/2018 | 1:12:10 PM
Radcom — leader in service assurance
VMware picks up Dell EMC service assurance suite. Now ERIC acquires CENX. Wonder if Radcom (RDCM) is next?
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