Communications

Oracle Buys Acme Packet for $2.1 Billion

Oracle Buys Acme Packet for $2.1 Billion
February 4, 2013 11:54AM

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"The communications industry is undergoing a dramatic shift as users become more connected and dependent on mobile applications and devices," said Oracle's Bhaskar Gorti, with the announcement that Oracle had acquired Acme Packet for $2.1 billion. "Service providers and enterprises need a comprehensive communications solution."

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Oracle just made another blockbuster acquisition. The company has agreed to acquire Acme Packet, a provider of session border control technology, for $2.1 billion. That sale price equals $29.25 per share. The transaction is expected to close in the first half of this year.

Acme Packet allows service providers to deliver voice, data and unified communications services and applications across IP networks. More than 1,900 service providers and enterprises, including 89 of the world's top 100 communications companies, are Acme Packet customers.

Oracle President Mark Hurd called the proposed acquisition of Acme Packet another important piece in the company's overall strategy to deliver integrated products that address critical customer requirements in key industries.

"The addition of Acme Packet to Oracle's leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more," Hurd said.

End-to-End Solution

With its latest acquisition, Oracle is tapping into a market demand. Specifically, users are more and more connected -- and they expect to communicate anytime and anywhere using their application, device, and network of choice.

"The communications industry is undergoing a dramatic shift as users become more connected and dependent on mobile applications and devices," said Bhaskar Gorti, senior vice president and general manager of Oracle Communications. "Service providers and enterprises need a comprehensive communications solution that will enable them to more effectively engage with their customers."

By integrating Acme Packet technology, Oracle expects to accelerate the migration to all-IP networks by making it possible for service providers to offer secure, reliable communications from any device, across any network.

Will Customers Resist?

Charles King, principal analyst at Pund-IT, told us Cisco's acquisition is part of the converged systems solutions trend where companies are moving to deliver hardware stacks that consist of servers, storage and networking from a single vendor.

"With the acquisition of Sun, Oracle had server and storage assets but it was also lacking networking assets and this new deal should give them much of what they need to increase the value of their converged infrastructure offerings," King said.

He said there were three issues to explore: how Acme Packet's solutions stack up against Oracle's competition; how the acquisition will affect Oracle's longstanding relationships with Cisco and Juniper; and how customers will ultimately respond.

"In the past, we've seen some resistance, specifically among enterprises that have a fairly large investment in Cisco hardware. They want to stick with the hardware that they know and understand," King said. "Adding yet one more network player to the mix may have questionable value for some of those customers."

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