Changing times: Oracle, Cisco move deeper into telco sector

If a clear indication was needed that IT and networking firms are looking to extend their reach beyond mere IP specialisation and get deeper into the telco vertical, it came this week when Acme Packet said it had agreed to be acquired by Oracle.

The US software giant said it plans to make the network session delivery specialist a core offering in its communications portfolio to help with the simplification of IT and network infrastructures.

Andy Ory, CEO of Acme Packet, said the deal will help service providers rapidly accelerate the transformation to all-IP communications networks across the globe. “The combination of our session border control and other solutions with Oracle’s powerful Communications portfolio will enable service providers to uniquely differentiate and monetize next-generation services.”

It’s long been recognised that the networking and IP specialists that dominated the IT world, would have scope to win telco customers as networks shift to all-IP. Indeed, competition in the vendor landscape is changing (as identified in our Industry Survey 2013), but Oracle’s move this week sends the company into deep telco territory. Any vendor that wants to be a full service partner to the telcos will need a blended strategy in order to be credible. Specialists will seek to align with full service partners, while others like Ericsson seek to become a one-stop shop.

Dana Cooperson, principal analyst at Ovum, said that companies that specialise in either telecom or IT will need a strategy of how they will benefit from this blending of what were two largely separate domains. “Software increasingly driving network capabilities: Although hardware is still important in many applications to provide needed performance, software is more and more critical for both differentiating and monetising network capabilities. Performance without monetisation is only half the equation.”

But Oracle, like Cisco, is in a favourable position in that it has the cash reserves to be aggressive and purchase assets to extend its portfolio.

At the end of last year, Cisco made clear its intention to acquire long-time partner Broadhop – a telecom specialist in the policy and charging areas. The acquisition would be a significant development for Cisco which has mainly operated through partnerships in this space.

Informa analyst Peter Dykes notes that much has been made in the media of Cisco’s potential inclusion of a respected and widely-deployed PCRF as part of the deal, but equally significantly would be the addition of both on- and off-line charging systems, subscriber data management and application gateway capabilities which are incorporated within the Broadhop Quantum platform.

There is even a suggestion that Cisco is looking to integrate itself more deeply within the telecoms vertical by shedding its old skin. A week ago the firm sold its home networking and wifi operation Linksys to Belkin. Moreover, there are murmurs that if the Broadhop acquisition goes ahead successfully, a logical next step for a company with Cisco’s pedigree would be to acquire a network infrastructure business, were one to be on the market at the right price.

The times they are a changin’.

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