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Oracle acquires Tekelec, continues on its telco foray

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March 25, 2013

Oracle has added another network-focused technology company to its portfolio, in an effort in trying to takeover the IT stacks of numerous telecom companies.

Oracle's planned acquisition of Tekelec was announced earlier today, and appears to be blending well with unified communications specialists Acme Packet for $2.1 billion just four weeks ago.

Oracle will add Tekelec's network signaling, policy control, and subscriber data management technologies, into its suite of products for telecommunication companies served up by its Oracle Communications division.

This will let the software giant further extend its business into service providers' networks, and gives it a chance to wield a particularly sticky type of product via Tekelec's broad network and service control layer technology.

By analyzing and better focusing on Tekelec and Acme Technologies, Oracle is hoping to capitalize on the spread of mobile devices and the ensuing data demands they place on networks.

"As connected devices and applications become ubiquitous, intelligent network and service control technologies are required to enable wireless and landline service providers to efficiently deploy all-IP networks, and deliver and monetize innovative communication services," said Oracle general manager Bhaskar Gorti.

"Overall, the combination of Oracle and Tekelec will provide service providers with the most complete solution to manage their businesses across customer engagement, business and network operations, service delivery, SLAs, QoS and end user applications."

The Tekelec assets fill out Oracle's service and network control areas. Tekelec's tech is used by over 300 service providers in over one-hundred countries, the company wrote. Major wireless and landline service providers such as AT&T, Verizon, T-Mobile, Vodafone and Sprint all rely on the technology.

With Oracle already supplying databases and other mission-critical systems to many of these companies, the acquisition means that when they next go to look at their technology, Oracle will look back at them from a broader part of their stack than before.

Cisco is seen as the potential loser here, since a good percentage of its customer base is telecom companies operating not just in the U.S. and Canada, but abroad.

Tekelec's important technologies are gathered together under its "new diameter network" suite. These products let telcos build and scale 4G, IMS and LTE networks, roll-out personalized subscriber-specific services, and help them partner with cloud and machine-to-machine (M2M) providers.

The key to this suite is the company's 'Diameter routing' technology, which is an edge network technology for protocol mediation (eg 3G/4G to LTE) and connection management.

By pairing Tekelec with Acme Networks, Oracle has substantially added to the service control and network control components of a telco infrastructure, paving the way for a takeover of service provider stacks by Oracle's own in-house technology.

"Our ambition is to be the primary technology provider to the telecommunications industry," Oracle chief Larry Ellison said in a call last week discussing the company's Q3 2012 earnings.

Tekelec's management team and employees are likely to join the company, according to an Oracle document that gives further information on the planned acquisition.

Oracle will also invest in Tekelec after the acquisition to broaden its R&D and technological advantage to cover customer relationship management (CRM) and operational support systems as well.

As is usually the case in such announcements, the financial terms of the agreement were not disclosed to the media. The deal is expected to close in September 2013.

In other IT news

Market research firm Gartner says that the global server hardware market is sending some mixed messages when it comes to their place in today's modern data centers.

On one hand, overall interest in data center servers still remains fairly high, and sales continue to climb as they were in 2011.

But the eventual transition to server virtualization, cloud computing and converged systems and platforms are forcing some companies to value server hardware a bit less and other IT infrastructure elements more.

As a result, the immediate future of servers seems a bit tenuous at the moment. Market research firm Gartner said server shipments were up 3.6 percent in the third quarter of 2012, and businesses invested more than $12.6 billion in those new servers, a number that is still very strong, even for a market that could accelerate its transition to virtualization going forward.

And a few factors have contributed to their ongoing popularity. Fortune 500 and even smaller companies continue to invest in IT solutions to operate and improve their businesses. As a result, they are expanding the reach of existing applications to new mobile devices and various social networking systems.

"Companies with legacy, heavy-duty enterprise applications and databases still buy standalone servers to run them on-- for compatibility, performance, resilience, compliance and various control reasons," said John Abbott, chief analyst at 451 Research.

Also, new high-performance applications are constantly emerging. "Large data sets have been a recent driver in the need for more server processing power," said Sam Barnett, directing analyst for data center and cloud at Infonetics Research.

Additionally, large organizations, governments and corporations of all sizes are collecting vast amounts of information and then relying on high-powered hardware to register trends that improve their operations, while learning more about their customers, suppliers and staff.

Source: Gartner Market Research.

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