November 27, 2006
IBM Corp. (NYSE: IBM) is set to further stake its claim as a major supplier of telecom software and services on Tuesday with the acquisition of wireless performance management specialist Vallent Corp. , Light Reading has learned.
The move will bolster IBM's position as one of the OSS industry's biggest players, as Vallent, which has more than 200 mobile operator customers, will give the IT giant a wealth of wireless carrier contracts and wireless service assurance capabilities. (See Mobiltel Uses Vallent's OSS, Vallent Wins Banglalink, Vallent Manages WiMax, Vallent Lands Croatian Deal, and UMC Picks Vallent.)
Those customers and capabilities will complement the fixed network, cable operator, and IP capabilities IBM acquired late last year when it snapped up one of the biggest players in telecom software, Micromuse. (See IBM Tiptoes to Telecom With Micromuse.)
Vallent's price tag is believed to be around $200 million -- about three times the company's estimated annual revenues of between $60 million and $70 million.
Vallent declined to comment on any acquisition speculation, while IBM declined to comment on what it calls "rumor and speculation." Light Reading believes the announcement will be made public on Tuesday, November 28.
IBM's move will be the latest in a string of acquisitions in the OSS space, and it makes sense for the IT giant as it looks to make itself an indispensable partner and supplier to the world's biggest carriers, which increasingly want to deal with fewer and fewer hardware, software, and services suppliers. (See Telcordia Up for Grabs Again?, Oracle Buys More OSS With MetaSolv, Amdocs Snaps Up Cramer, CA Makes Wily Acquisition, and Syndesis Acquires CoManage.)
And during the past year, IBM has shown itself to be one of the select band of companies that major carriers trust for in-depth, long-term projects: Australian incumbent Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) handed "Big Blue" (as it used to be known) a six-year back office integration contract; India's Bharti Airtel Ltd. (Mumbai: BHARTIARTL) awarded the company a $100 million deal to develop, manage, and operate a service delivery platform (SDP); and Vodafone Group plc (NYSE: VOD) recently awarded IBM a massive outsourcing deal. (See Telstra Outlines Massive OSS Project, IBM to Manage SDP for Bharti , and IBM, EDS Share Vodafone Spoils.)
It also showed how hungry it is for carrier action by developing Pasta (Presence Advanced Services for Telco Applications) with Norwegian carrier Telenor Group (Nasdaq: TELN). (See Hasta La Pasta.)
IBM has also been cementing relationships with a number of the biggest traditional telecom equipment vendors. (See Lucent, IBM Team Up and Nortel, IBM Demo IMS .)
Now the Vallent acquisition will give IBM a leading position in one of the telecom software world's most important sectors. Vallent specializes in wireless network and service performance management that helps mobile operators pre-empt network outages and measure the quality of service being experienced by customers connected to their networks. (See Vallent Shows Off Its OSS.)
Those capabilities, note industry analysts, are vital for mobile carriers as they ramp up their data services and look for ways to keep their customers connected and happy, and so reduce churn.
Analysts at Dittberner Associates Inc. , for example, noted recently that "network failures have become so costly in terms of lost revenue and customer dissatisfaction that operators are employing more performance management solutions to proactively monitor, predict, and provide corrective action before major network or service outages occur."
They also noted that Vallent, along with Telcordia Technologies Inc. , is "introducing advanced Service Quality Management (SQM) solutions that analyze services though superior service modeling and correlating feeds from performance management, signaling, and network probes." (See Dittberner Reports on OSS.)
Vallent will also enhance IBM's partnership network, as the wireless OSS firm has deep relationships with a number of key mobile equipment vendors, including Alcatel (NYSE: ALA; Paris: CGEP:PA), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Lucent Technologies Inc. (NYSE: LU), Motorola Inc. (NYSE: MOT), and Nortel Networks Ltd. . (See Ericsson Selects Vallent and Huawei, Vallent Team.)
For those who don't recognize Vallent's name, the company is the amalgamation of three specialists in mobile service assurance. In late 2003, network performance management specialist Watchmark merged with service management firm Comnitel to form Watchmark-Comnitel. (See WatchMark and Comnitel Merge and OSS M&A Bug Spreads.) Then in October 2004 that merged entity acquired ADC (Nasdaq: ADCT)'s OSS business, Metrica, to create a mobile service assurance powerhouse. In February 2005 the company decided on the Vallent name (instead of Watchmark-Comnitel-Metrica, which would have been too much of a mouthful). (See ADC Sells Metrica to OSS Rival.)
The company has been backed by a number of venture capital firms, including Argo Global Capital LLC , Columbia Capital , Ericsson Venture Partners , Investor Growth Capital , New Venture Partners LLC , and Pequot Capital Management Inc. . It's unclear how much total funding the company has had in its various guises, though Comnitel had raised more than €30 million ($39 million) before its merger with Watchmark, which had raised more than $50 million.
— Ray Le Maistre, International News Editor, Light Reading
You May Also Like
5G Transport & Networking Strategies Digital Symposium.Nov 07, 2023
Improve Service Efficiency in the Call Center and Field with Slack AutomationNov 08, 2023
Open RAN Evolution Digital Symposium Day 1Nov 14, 2023