Eric Krapf
Eric Krapf is the Program Co-Chair of the Enterprise Connect events, helping to set program content and direction for the...
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Eric Krapf | February 04, 2013 |


Very Big Deal: Oracle Buys Acme Packet for $1.7 Billion

Very Big Deal: Oracle Buys Acme Packet for $1.7 Billion The software giant buys the leading SBC player. This represents a major upheaval in the communications industry.

The software giant buys the leading SBC player. This represents a major upheaval in the communications industry.

This is major news: Oracle has agreed to buy Acme Packet, the pioneering Session Border Controller (SBC) manufacturer, for $1.7 Billion.

It's a big deal for a lot of reasons. SBCs in general, and Acme in particular, as essentially the inventor of this product type, are increasingly critical as communications evolves toward IP. Indeed, the subhead of the Oracle press release on the deal states that they're making the acquisition " to Speed the Deployment of All-IP Networks."

As their name suggests, SBCs sit at the border of networks and glue those networks together, rationalizing unlike protocol implementations. Acme Packet has a big business in the carrier space, especially with mobile operators; they initially built big carrier-scale SBCs that could support massive numbers of sessions, translating between different implementations of IP among the different carriers. Then they started scaling their boxes down to connect enterprises with their carriers, and as such they've become one of the leaders in SIP Trunking implementation for the enterprise.

A lot of us in the communications end of the business have wondered over the years whether Oracle was going to make a serious play in our industry, and if so, how. The more obvious choice was to go the CEBP route, and essentially try and force communications functionality into applications; to essentially put a communications back-end onto Oracle applications, so that call control becomes a feature of the Oracle app. That's essentially what SAP is starting to do, and the notion of Oracle buying one of the PBX companies always looked like a possibility.

Another possibility was for Oracle to build a standalone communications system a la Salesforce Chatter, and push it as heavily as Salesforce has pushed Chatter. This would have been a tougher sell, at least as a client that the user would adopt in the way Chatter has been adopted. But Oracle has sniffed around this strategy for years, and in fact they still have a piece of it with their Beehive Collaboration Software. One question that I think now arises is whether Oracle plans to essentially put Acme Packet and Beehive together to create what would basically be the next-generation "PBX", to use the term very loosely (but not entireley inaccurately; it would be a "private" platform that would "exchange" communications sessions, on behalf of "branches" that might happen to be as small as, well, a cell phone).

The acquisition is also a huge deal because Oracle is Oracle--a massive company that has now made a major commitment to the communications space and will have the kind of account access that your Microsofts and Ciscos have and that your Avayas, Siemens, etc. lack. Every CIO--and probably quite a few CEOs--can tell you off the top of his or her head how much they spend with Oracle every year, and maybe even the name of their Oracle account lead, and their kids' names too.

The deal, and who made it, also carries profound suggestions about the future of Acme Packet's products, and SBCs in general. Oracle is a software company, and I seriously doubt they think that they're buying a hardware/box company. SBCs are headed into software, at the datacenter level. This sets up an interesting struggle with Cisco, who's promoting the idea of SBCs at the branch office, implemented (of course) within the branch office router.

Finally, no first take on this deal would be complete without an admonition to keep your eye on Sonus, AudioCodes, and Genband. These are the other players in the SBC field, which just got very, very hot.


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