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Acme Packet buy designed to enhance Oracle communications portfolio

Mark Fontecchio

Oracle's planned multibillion-dollar purchase of networking company Acme Packet is less about Oracle competing directly with networking giants like Cisco, and more about bolstering Oracle communications applications like customer relationship management

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and collaboration, according to experts.

Oracle started as a database company, and has since become an applications, middleware and server hardware company, as well. Oracle's agreement to buy Acme Packet for $1.7 billion – which was announced on Monday and is expected to close by mid-year -- has left some wondering if Oracle is also looking to become a networking company. But analysts say, "No, not really."

"It's not like they're competing head-on with Cisco now," said R "Ray" Wang, principal analyst and CEO at Cupertino, Calif.-based Constellation Research Inc. "They're adjacent. It is something that Oracle needed for the industries they serve, as well as for their engineered systems."

Acme Packet has built its name on session border controllers (SBCs), which help prioritize and improve communications over IP networks. For example, Wang said an SBC can give priority to someone making a call on Voice over Internet Protocol (VoIP) over someone in the same network streaming a movie. Oracle said Acme Packet has more than 1,900 service providers as clients, including big ones such as AT&T and Verizon. It also has enterprise customers such as Samsung, Siemens and ADP.

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Akshay Sharma, a research director at Stamford, Conn.-based Gartner Inc., said SBCs also code network packets in such a way as to maximize their quality. He said that Acme Packet SBCs are built into the popular Skype application, and added that Acme Packet is one of the market leaders in SBCs.

But something has happened since SBCs grew in popularity. Sharma said SBCs are slowly being moved off proprietary hardware and instead are being built into generic hardware for general use. That, he said, is likely what is attractive to Oracle, which can take those SBCs and integrate them into its big-box systems like Exadata, Exalogic and Exalytics.

Once the SBCs are part of Oracle's own infrastructure, the company can integrate them with its own applications to presumably improve how they function on all-IP networks.

"You might think of a CRM solution getting trouble tickets in," Sharma said. "They can route the issues to the right engineer."

Sharma added that the acquisition of Acme Packet could help Oracle with offering communications-enabled business processing, or CEBP. In a nutshell, CEBP integrates communications capabilities into business process management software. The idea is to allow communication between applications, as well as between applications and humans, in order to automate business processes. A big player in the CEBP space is Avaya Inc.

Overall, Wang said the acquisition means improvement for Oracle's communication software.

"At the end of the day, you have to figure out how to begin a voice conversation, and how can you do that within your secure network." he said. "How can you make sure your signal will get where it needs to go?"


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