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Oracle Not Done with Its Telecom Foray

Tekelec gives Oracle second-to-none expertise in signaling, where it is the leader not only in the Signaling System 7 (SS7) protocol, with more than 300 carrier customers, but also in the emerging Diameter market. Tekelec also has a dominant market share in the DSC (Diameter Signaling Controller) segment, with over 30 LTE DSC operators. Additionally, Tekelec has grown its policy control (roughly 60 customers) and SDM (Subscriber Data Management) product lines (over 35 carriers) via the acquisitions of Camiant and Blueslice Networks. With a repository of policies and subscriber data, Oracle will create stickiness with its customer base and further expand its footprint into the telco space, where it already had a leading position in database infrastructure.

Oracle's Next Move?

After acquiring two companies in the telecom space, Oracle management hinted at financial services and retail as other verticals the company would delve deeper into via innovation or acquisition. However, I believe that the company will further bolster its telecom stack. Here are a few possibilities:

DPI (Deep Packet Inspection) - this is an important capability that can enhance the Oracle charging solution set. Players such as Allot Communications (ALLT) (which maintained a relationship with Tekelec to enhance the latter's PCRF product in accounts such as Orange, Verizon (VZ) and Vodafone (VOD )) and Procera Networks (PKT) (which partnered with Tekelec in some accounts such as Comcast) can be distinct possibilities.

Video optimization - these systems can further augment the utility of policy control systems. As per Cisco's (CSCO) VNI (Visual Networking Index) forecasts, video is going to be the key component in mobile traffic growth, so this will be a hot area, as attested by last year's acquisitions of Bytemobile (by Citrix (CTXS)) and Ortiva (by Allot). Other current standalone vendors include Flash Networks and Vantrix.

SDN (Software Defined Networking) vendor - as part of the future "Thinking Networks" vision outlined by Tekelec, there is a "policy-directed SDN controller" element that leverages SDN technologies such as OpenFlow to dynamically control traffic entering or leaving a cloud-based DSC. The acquisition of an SDN startup can accelerate the time-to-market of this component. The field is wide open here, with over 200 companies competing in the nascent SDN arena.

Oracle might still opt to delve into the applications arena via Broadsoft or some other smaller incremental purchase in the UC/RCS (Rich Communication Suite) arena such as Mavenir (VoLTE/RCS) or app enablement (via APIs) such as Solaiemes or other vendors that are enabling carriers to formulate a response to the ongoing OTT (over-the-top) threat of new players such as WhatsApp. Post Acme Packet and Tekelec, Oracle now has a full arsenal of control/application plane functions at its disposal.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Ronald Gruia is a Director at Frost & Sullivan covering emerging telecoms. He has spoken at conferences including Supercomm, CTIA, Intel Communications Summit and VON Canada.
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