Mobile Leadership Strategies

It was announced recently that database giant Oracle had finalized a deal to acquire Acme Packet, a Massachusetts-based company that manufacturers IP network devices.

According to The Boston Globe, the total sale price for the acquisition will cost Oracle about $1.7 billion. That’s after Oracle agreed to pay $29.25 a share in cash, which is 22 percent more than the value of Acme’s stock at closing on Friday, Feb. 2. The news provider noted that while Acme Packet was not up for sale, officials within the company had said previously it could be bought if someone was willing to pay “full current value and enough of the future value.”

Acme’s devices enable voice, text and video content to move easily between wired and wireless networks—making the flow of traffic smooth. With such devices deployed, companies can run private IP networks and easily connect them to public phone systems, the news provider noted.

Yankee Group VP of Research Brian Partridge comments

“While my first reaction was one of surprise, this could be a very good deal for Oracle in the long run. Acme Packet is the clear leader for stand-alone session border networking—providing the gear that allows enterprise and service provider IP networks to securely pass traffic between themselves and each other—in particular SIP traffic. This is a strategic deal for Oracle, which is paying a fairly handsome premium but in turn getting a market-leading suite of solutions and a world class install base of customers.

This move proves Oracle is getting serious about IP networking and this deal could be the first of many to build its competencies at the intersection of networking and IT. This deal also has significant implications for the Oracle offering in the context of mobile network transformation. As mobile operators evolve their 3G networks to 4G, the routing and control of messaging protocols such as SIP and Diameter become as critical for service delivery as SS7 and CAMEL are now; Acme happens to specialize in that very area.

Acme and Oracle come from a similar DNA as engineering and product companies so the cultural fit should be solid. Acme Packet delivers Oracle a powerful software stack that it can integrate onto its high-end servers over time—what remains to be seen if an Oracle SBC can create pull for the traditional Oracle communications suite of applications such as charging, unified communication, etc. Acme Packet’s infrastructure competitors such as Sonus and Genband will need to reboot their competitive value propositions to reflect this new converged player.”