What’s in the Oracle and Acme Packets Deal?

Oracle announced its intention to buy Acme Packet, a company it describes as a leader in session border control technology for carriers and enterprises.  On the surface, this would appear to be a deal targeting the VoIP, mobile/LTE, and UC/UCC spaces, and surely that dimension of the M&A will worry network giant Cisco, who has a major stake in using UC/UCC as a lever point to spring into a key role with servers and IT in both the enterprise and SP spaces.

Sessions are a decent way of creating a secure and controlled information pathway, not only for voice/video and UC/UCC but in theory for anything that requires special handling.  That’s why IMS proponents have pushed for IMS-session services like RCS rather than traditional best-efforts web services.  The question has always been whether this special handling, which obviously requires incremental infrastructure, is something users will pay for.  In the broad market, the answer may be clearly “No”.  But the deal may go beyond that.  UC/UCC, after all, is a market that’s been reportedly on the verge of taking off since some of the current executives in the space were teens.  Oracle may realize that and be looking at something else.

Hypothetically, like SDN and NFV.  In fact, if ever there was a deal that literally screams “Network Functions Virtualization!” it’s the decision by Oracle to buy Acme packet.  Or at least that’s what it had BETTER signal if Oracle hopes to get any bang for its bucks out of the acquisition.  And speaking of “hopes” the move into SDN/NFV would dash more than a few M&A hopes of other network vendors.  Oracle is one of two IT giants (the other being IBM) who has no networking position; they’re a software company with server technology they acquired out of their Sun acquisition.  With Cisco and HP striving to be full-service network/IT players, many have expected Oracle to respond by acquiring some network switch-and-router vendor.  I didn’t see that as logical, frankly, because margins on switching and routing have nowhere to go but down and most players don’t want to buy into a declining market.  Oracle may be proving my point; for themselves and maybe for IBM too.

The service layer is another story. Certainly UC/UCC is a space where session value would be easier to establish than it might be for content delivery or website access, and so it’s very likely that there are some at Oracle who see an immediate opportunity with session-level services for UC and LTE.  Managing security is one of the things that Acme has been on an M&A kick to support, too, and it fits well with Oracle’s growing portfolio of management tools.  Of course, we’ve heard this song before for session services and UC/UCC too.  There may be deeper assets within Acme Packet.  Recall, for example, that Acme Packet also used to be a big player in DPI, and they still have quite a bit of DPI technology in their DNA.

SDN and NFV are both about pulling functionality out of network devices to dumb them down, and in our January issue of Netwatcher I described the logical culmination of that trend as a Policy-Handling Engine or PHE with cloud-hosted control logic.  If you wanted to build a PHE from boxes out there today, what Acme produces would be a decent start.  Thus, Oracle may be looking not at “networking” as it is today, dominated by bit-pushing, but as it will be in the future, dominated by service-pushing.  The difference between bits and services is context, and the best source of context in the market today is deep packet inspection combined with policy management.

My view here is that this is too big a deal for Oracle to be totally linked to UC/UCC and SIP sessions.  But even if it is, there are going to be major ripples not only in the UC/UCC and SIP spaces but in the overall network equipment space as well.  Oracle is a very big player with enormous assets in the critical software space, and networking is a market area crying out for software smarts—in more ways than one.

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