Oracle Corp. intends to acquire Bedford, Mass.-based session border controller vendor, Acme Packet, for $1.7 billion.
As enterprises shift toward session initiation protocol (SIP) trunking and IP services for more flexible communication across networks and devices, service providers are also beginning to move their legacy public-switched telephone network (PSTN) infrastructures into retirement. Oracle, the Redwood Shores, Calif.-based enterprise software vendor, hopes Acme Packet's session border controller (SBC) technology -- which delivers voice, data and unified communications (UC) services and applications across IP networks -- will bolster its communications business.
"Service providers and enterprises need a comprehensive communications solution that will enable them to more effectively engage with their customers," said Bhaskar Gorti, senior vice president and general manager of Oracle Communications. The combination of Oracle and Acme Packet technology will help to accelerate IP migration by enabling secure and reliable communications from any device, across any network, which is a growing enterprise need and a win for service providers, Oracle said in a statement.
Oracle's Acme Packet acquisition: A push for IP migration
Oracle has been building up its communications business for several years with unified communications, and contact center and customer relationship management software products. The acquisition of a networking vendor is a natural extension toward service delivery of these applications, said Diane Myers, principal analyst for Voice over Internet Protocol, UC and IMS at Campbell, Calif.-based Infonetics Research.
While integration details have not been formally announced, Acme Packet's SBC technology will be included in Oracle's communications portfolio to add IP networking tools, and to simplify IT and network infrastructure for both enterprises and service providers.
While the migration towards all-IP may still be in its early stages, traditional IT applications are becoming increasingly session-based, and competition for SBC technology within the service provider and enterprise space has been heating up, Myers said. Vendors like Oracle will be looking to scoop up pure-play SBC vendors -- like Genband and Sonus Networks -- to round out their communications offerings.
Oracle -- with its software offerings geared toward both service providers and enterprises -- is in a unique position to make SIP trunking and IP communications more pervasive through its pending acquisition, said Akshay Sharma, research director for Stamford, Conn.-based Gartner Inc.
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"I think this [acquisition] goes lockstep with Oracle's vision to 'softwarize' the entire IT landscape," he said.
The integration of Oracle and Acme Packet's technology will allow service provider and enterprise customers to elastically control their network as communication traffic demands via a "pay-as-you-grow model," Sharma said.
"The pay-as-you-go model will evolve and change the paradigm," he said. "Rather than spend hundreds of thousands, having equipment sitting idle most of the time, now [users] will be able to pay as session management is needed."
The acquisition will also strengthen Oracle's ability to compete with Cisco in the enterprise space, said Greg Collins, founder and principal analyst at Exact Ventures market research firm. "Acme Packet's SBC and session management technology could be bundled with Oracle's applications to offer higher performance and greater scalability," he said.
Oracle has agreed to pay $29.25 a share for Acme Packet. The acquisition is subject to regulatory approvals and should close during the first half of 2013.
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