By now, you may have heard that Oracle announced it will acquire Acme Packet for about $2 billion. Is this another tile in this mosaic we are seeing where NEMs and OSS/BSS players are aligning to win long term, multi-billion dollar managed services contracts? Is it a harbinger of a really big NEM acquisition yet to come? Or is this a statement about Oracle’s desire to set a course for its CGBU (which contains it’s OSS/BSS business) and dominate Big Data in telecom and all of the enterprises CSPs touch?
Two quotes from the CNBC piece I’ve linked to above jump out:.
“Oracle Chief Executive Larry Ellison…said in October he would not rule out a big deal ‘down the road.'”
Is this the “big deal” to which Ellison was referring? I don’t think it is. A $2 billion acquisition doesn’t sound like a “big deal” for a $37 billion company, by annual revenue, that generates almost $14 billion in operating cash flow. This acquisition turns over a few letters in Oracle’s acquisition Wheel of Fortune puzzle, but I don’t think we can tell Pat we’re ready to solve it just yet.
Acme Packet is basically a signalling company. It’s known especially as a Session Border Controller (SBC) vendor, but has products in other areas, like Diameter signalling. When you’re sitting on the signalling network, you see an awful lot of useful data about what’s flowing across networks and how people are using different devices and services. So, given that Oracle wants (and probably needs) to be a leader in the “Big Data” game, this could be seen as Big Data play, and not necessarily as an end-to-end NEM move.
This quote from Mark Hurd sheds a bit more light:
“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 calls out enterprises specifically here, and talks about interactions – how people use devices; commerce – how people pay for stuff with devices; healthcare – how President Obama is pushing the US healthcare industry into the digital age; and security – how everyone in the world is more afraid of guns and bombs than we’ve been since World War II. So, there’s an enterprise angle to this that speaks not only to Oracle’s presence in enterprise IT and its recognition that enterprise IT and enterprise networking are now inextricably linked, but also that CSPs know they need to be a big part of that linkage (i.e. the Cloud) for their enterprise customers.
More specific to OSS/BSS, I think this deal merits attention because Hurd’s comments put Oracle’s CGBU directly in the spotlight. Colleagues express a perception that this business unit has been a sort of overlooked middle child within this monstrous company. This acquisition strategy may be intended to inject some life, direction, and new-found structure into this increasingly important part of Oracle’s business.
It would make sense that Oracle would see CGBU, with Acme Packet on board, as a center for Big Data in telecom. Big Data from signalling networks can feed billing; it certainly feeds CSP network analytics; but more importantly it feeds analytics that relate to how consumer and enterprise applications and devices are interacting, transacting, and performing across networks. That data has great value to enterprises and huge value to Wall Street. So, if this isn’t another step in the NEM + OSS/BSS direction, then I’d say it’s a sign that Oracle is setting its OSS/BSS rudder on a course toward dominating Big Data in telecom because it sees that CSPs provide the bridge between Oracle’s traditional business – enterprise IT, and where that business is headed – toward Big Data and the Cloud.