This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Oracle Not Done with Its Telecom Foray

Stocks in this article: ORCL BSFT ALLT CTXS CSCO

NEW YORK ( TheStreet) -- After the Acme Packet acquisition, many industry pundits felt that Broadsoft (BSFT) would be the next target for Oracle (ORCL) in the quest to bolster its communications portfolio. The two key arguments for this thesis were the fact that Acme and Broadsoft had been working very closely together since around 2000, and that Broadsoft has an attractive current price after reporting soft results in the last quarter of 2012 (BSFT had lost about 50% of its valuation since its Q4'12 results and weak 2013 guide before bouncing back up with a good Q1'13).

The close relationship between Acme Packet and Broadsoft developed quickly, since both were startups in the VoIP space and there were synergies due to the complementary nature of their products. Acme's strength was in the Session Border Controller (SBC) arena, where it has a leading product that sets up, manages and terminates sessions between a user and his target destination (be it a private IP address, a SIP trunk operator or the public Internet), delivering the necessary data (voice, video, data) and performing functions along the way (coding/decoding, security, etc.).

On the other hand, Broadsoft makes a leading VoIP SIP application server offering a plethora of services. These include call handling (for example, call forwarding and music on hold), voice/video conferencing and unified communications (integrated voicemail, email, text, faxes). The two products go hand-in-hand: an enterprise deploying a VoIP app server would typically need an SBC at the edge of its corporate network. Therefore, the two companies share a pretty similar customer base constituted by large enterprises and carriers reselling VoIP services to smaller enterprise customers.

However, much to these experts' surprise, the next M&A move Oracle made in March was Tekelec. No financial terms were disclosed, but Tekelec had been taken private in January 2012 by a consortium led by Siris Capital for $780 million. Oracle made this acquisition realizing that it needs to make a bold move into the carrier space, not only to get more diversification away from enterprise/SaaS, but also to be able to maintain its highly skilled and remunerated sales force. This objective is harder to achieve in the enterprise software space, where deals are getting smaller and margin squeeze is becoming more prevalent. By selling carrier solutions that are highly customized, involving not just software but also hardware appliances, Oracle will be able to maintain its current sales modus operandi.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs