Oracle made an unexpected, creative and strategic move yesterday with its purchase of Acme Packet for $1.7bn. Acme Packet is a US-based “global provider of session border control technology:” It facilitates delivery of voice, data and unified communications services and applications over IP networks. Acme is used particularly by telcos but also by large enterprises and service providers such as ADP: it has some 1900 customers including 89 of the world’s top 100 telcos.
Why do we say creative and strategic? This move was simultaneously offensive and defensive, and extends the company’s reach in several different ways:
- it consolidates Oracle’s position in the telecoms industry vertical; Oracle has built a strong position in telecoms with its cross-industry offerings (database, middleware and Siebel CRM in particular), with its industry-specific applications such as Netsure, Portal Software and Metasolv and with the acquisition of Sun Microsystems, a company also strong in the telecoms sector, and Xsigo, which has technology for software-defined networking;
- this greatly strengthens Oracle’s ability to make money from the move to mobile applications, something where it has recently been seen as lagging the market; with Acme it is looking to ride the wave of ‘anywhere, anytime’ enterprise communications apps;
- this also strengthens its already solid story on cloud solutions provision; and, in the “virtual workplaces” (cloud collaboration) market, the communications part (a potential service provider revenue stream) is generally not part of the offering – or at least not integrated;
- at a time when competitors (notably SAP) are moving into its heartland areas of database and analytics, this extends its reach into infrastructure areas that few of its close peers play in – core network solutions. Oracle’s positioning as a supplier of enterprise IT from chips right through to apps is notably extended.
As we noted in a recent blog post, we expect more moves from Oracle particularly on the mobile enterprise front during 2013. The Acme Packet buy shows that Oracle will not be content with a me-too approach to building its business.