This Day On The Street
Continue to site
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

Oracle Not Done with Its Telecom Foray

NEW YORK ( TheStreet) -- After the Acme Packet acquisition, many industry pundits felt that Broadsoft (BSFT - Get Report) would be the next target for Oracle (ORCL - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ALLT $5.42 0.00%
BSFT $39.16 0.00%
CSCO $27.49 0.00%
CTXS $81.84 0.00%
ORCL $39.86 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs