Nokia Siemens Snaps Up IMS Vendor
The news comes only two months after NSN, which experienced a torrid first eight months in business, announced the acquisition of Ethernet equipment vendor Atrica Inc. for an estimated, though unconfirmed, price tag of $100 million. (See Nokia Siemens to Acquire Atrica, NSN Products Face Further Cuts, NSN Improves, Confirms Extra Cuts, Siemens Fined, Unhappy With NSN, and Instant Revamp for Nokia Siemens.)
So what's NSN buying this time?
Apertio's data base technology, the One-NDS (Network Directory Server), acts as a data base for legacy subscriber management platforms, such as the HLR (home location register) used by mobile operators, and, more importantly, for the next-generation HSS (home subscriber server), a core element in an IP Multimedia Subsystem (IMS) that manages the subscriber data underpinning mobile and fixed-line services. (See What's Up With IMS?)
Having a unified subscriber management database will be important for carriers wanting to operate a single, converged network for all its subscribers and have a single source of operating data to underpin important new revenue-generating services based on identity management. (See Customer Focus Through Identity Management, Report: Identity Crisis Looms for Telcos, and Telcos Face a Web 2.0 Identity Crisis.)
Such unified data bases will, for the larger carriers, be comparatively large compared with the smaller, multiple data bases operators have relied on in the past. That's why Apertio developed a telco-specific distributed data base technology that's based on X500, the telecom industry's standard carrier directory technology. This, claims Apertio, makes it easy for carriers to understand and integrate, and also makes it cheaper to manage than other, non telco-specific data base technologies.
As well as supplying the One-NDS database to more than 40 operators, including multiple Tier 1 carriers, the startup's technology is also used by larger vendors, including Nokia Siemens, as the foundation for their own HLR and HSS products. (See Apertio Wins at Vodafone, T-Mobile Deploys Apertio, Apertio Wins at Tele2, Orange Offers BlackBerry 8800, Moto Unveils IMS Partners, and Apertio Wins Telcordia OEM Deal.)
Among Apertio's other main vendor partners are Motorola Inc. (NYSE: MOT), which has been reselling Apertio's data base technology as part of its IMS offering, and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), which uses One-NDS as the foundation for its HLR offering. (See ZTE Adopts Apertio for HLR.)
So what will happen to these relationships once the acquisition is complete? While NSN had not yet responded to questions, Apertio, in an email to Light Reading, said Nokia Siemens "will review Apertio’s reseller partner relationships over the coming months, working to maintain and grow these partnerships where appropriate."
That doesn't sound too encouraging for Motorola, for sure.
A spokeswoman for Motorola, though, says "it's business as usual. There is no immediate impact" on the relationship.
Apertio, until recently a Light Reading Top Ten Private Company, has also developed its own HLR and HSS applications that it sells direct to operators, and recently added to its portfolio with the acquisition of German policy management software specialist Netzwert AG. (See Apertio Acquires Netzwert and Light Reading's Top Ten Private Companies.)
According to Nokia Siemens, Apertio is on course to generate 2007 revenues of €28 million ($41 million), but the Bristol, U.K.-based firm, which has 237 staff based around the world (Berlin, Chicago, Bangkok, Beijing, and Kuala Lumpur, as well as its HQ), is not yet profitable.
The move will strengthen NSN's in-house capabilities as the vendor battles the other IMS giants -- Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Motorola, Nortel Networks Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- for next-generation upgrade contract awards. (See Ericsson, Others Top FT's IMS Shortlist, NSN Wins IMS Deal, and Com Hem Launches IMS.)
The acquisition, which is expected to close this quarter, will deliver a four-fold return for Apertio's investors, who had pumped €41 million ($60 million) into the firm. The startup had previously favored an IPO as the best way of providing its backers -- Add Partners , Deutsche Venture Capital (DVC) , Eden Ventures , Motorola Ventures , and T-Mobile Venture Fund -- with an exit. (See Apertio AIMs for 2007 IPO and IMS Firm Raises $30M.)
NSN plans to form a new business line, headed up by Apertio CEO Paul Magelli, within its Converged Core business unit once the acquisition is complete.
— Ray Le Maistre, International News Editor, Light Reading