Test & Measurement

Ixia Digs on Wireless, PBT

Ixia (Nasdaq: XXIA) says it's ready to spend more money on acquiring wireless testing expertise despite having to write off and close down its last two M&A-led ventures into the world of mobile measurement.

That continued commitment to the wireless world comes as the test equipment vendor talks up its carrier Ethernet prospects, having announced PBT (Provider Backbone Transport) test capabilities during this year's NXTcomm show in Chicago. (See PBT Parties On, Ixia Tests PBT, and PBT: New Kid on the Metro Block.)

First, though, Ixia's wireless adventures.

In reporting its most recent quarter late last month, the IP and Ethernet test system vendor, which generates more than $40 million in revenues each quarter and sports a market cap of $616 million, noted that it had recorded a "non-cash, pre-tax impairment charge of $3.3 million" attributable to asset writedowns. (See Ixia Reports Q2.)

Those writedowns were related to the winding down of two wireless test operations it had bought -- Communication Machinery Corp. (CMC), a WLAN capacity test tool firm acquired for an undisclosed sum in July 2005, and Dilithium Networks, a mobile video and multimedia test tool vendor bought in January 2006 for $5.1 million. (See Ixia Buys CMC and Ixia to Buy Product Line.)

But, Ixia's report added: "While the Company expects to curtail future development efforts on both these product lines, Ixia will continue to support the existing customers of these products. Ixia remains committed to the wireless test market and expects to launch additional wireless test products that address 3G and IMS [IP Multimedia Subsystem] over the next 12 months."

And not only that, it's looking to buy some more wireless assets.

Mike Attar, Ixia's senior director of investor relations, says there "simply wasn't the demand we had anticipated" for the CMC and Dilithium test tools -- CMC didn't deliver because "people have a lot of WLAN access points but customers don't end up testing them," while Dilithium's tools were designed to test video over circuit-switched mobile networks, and the demand now is for mobile IP video test capabilities.

The company's wireless focus, instead, is on IP developments in 3G networks and IMS, adds Attar.

Vic Alston, Ixia's senior VP of product development, says those were "good products to dip our toes into the wireless test area." Now the strategy is to find wireless test capabilities that can be integrated onto Ixia's common test platform, and tackle the 3G market from that perspective.

"We're interested in getting more technology onto our shared platform, and we've acquired some intellectual property, that we haven't announced, to add 3G and 4G testing capabilities. And we're on the look out for more acquisitions to gain more market and customer exposure" in that sector, where Ixia is looking to develop test capabilities that vendors can use to put their wireless IP products, such as GGSNs (Gateway GPRS Support Nodes) and SGSNs (Serving GPRS Support Nodes), through their paces in the lab.

As for IMS, Ixia is building some capabilities using technology it inherited as part of its February 2004 acquisition of VOIP performance and conformance test technology startup G3 NOVA Technology, which cost $9.1 million. (See Ixia Acquires G3 Nova for VOIP.)

Those capabilities are being integrated onto Ixia's common platform just now and the resulting IMS test capabilities will become commercially available during the current quarter, having been pre-announced earlier this year, says Alston. (See Ixia Tests IMS, VOIP.)

PBT in demand
As for the firm's PBT test capabilities, Alston says interest has been strong since NXTcomm, with "a variety of network equipment manufacturers, such as Extreme Networks Inc. (Nasdaq: EXTR), wanting to test their products in the lab. There's been an uptick in interest in Carrier Ethernet in general," he adds. (See PBT Stars at Ethernet Expo and Extreme Joins Ecosystem.)

He says Ixia has been working with Nortel Networks Ltd. , the driving force behind PBT, for the past 12 months, "and that's allowed us to develop and introduce some capabilities into our platform. We've seen a lot of urgency in the past 12 months from companies such as BT Group plc (NYSE: BT; London: BTA), Huawei Technologies Co. Ltd. , and Verizon Communications Inc. (NYSE: VZ)," all companies linked to PBT, either directly or, at present, indirectly. (See BT Pressures Vendors Over PBT, Huawei Joins PBT Fan Club, and Verizon Preps God Box RFP.)

So is Ixia going to be joining Nortel's PBT-driven Carrier Ethernet Ecosystem? (See Nortel Pushes PBT Pact.)

"We're working closely with Nortel on its developments," is all Alston will say. Nortel had not responded to questions about its working relationship with Ixia as this article was published.

— Ray Le Maistre, International News Editor, Light Reading

millomar 12/5/2012 | 3:03:59 PM
re: Ixia Digs on Wireless, PBT Ixia only bought the test tool product line of Dilithium Networks rather than the whole company as is stated in the article. The announcement of the sale can be seen on Dilithium's website http://www.dilithiumnetworks.c...

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