What is Oracle Thinking?
What is Oracle Thinking? by Dave Michels
I didn’t see this one coming. Today, Oracle announced its intent to acquire Acme Packet for $1.7 billion. Oracle became a hardware company when it acquired Sun, and offers a variety of hardware and software solutions for the data center and cloud adopters. Acme Packet is the global provider (and innovator) of session border controllers (SBCs) for service providers and enterprises.
According the statements from Oracle, the company plans to make Acme Packet a core offering in its Oracle Communications portfolio. It wants to assist its enterprise customers to “more effectively engage customers.” Oracle currently sells into both enterprise and carrier markets: the two big revenue markets for SBCs. That all sounds perfectly logical, but where’s the synergy?
Acme taught us all what an SBC does and why they are important. SBCs are effectively firewalls for real time SIP-based traffic. They offer improved security and a variety of other features necessary for mission critical Internet-based communications. The traditional firewall model isn’t well suited for SIP, so Acme solved it with new product technology. The TLA “SBC” became part of our standard UC lexicon. Acme has been very successful by making SBCs largely understood and regularly implemented. But, as the market it created matured, so has the competition.
Not long ago Acme owned the SBC market. Firms like Avaya and Siemens Enterprise resold Acme with their UC solutions (and often still do). But Avaya and Siemens Enterprise now offer their own SBCs. Just last quarter, Infonetics announced that Cisco overtook Acme in enterprise SBC sales. Last year, Sonus expanded its SBC offerings from carrier to enterprise, and many firewall vendors now offer SBC features within their existing offerings (to existing customers).
Sun had the tagline about the network being the computer. Perhaps Oracle now sees SIP as the protocol of said network. The company offers justification of the acquisition by pointing to our increased connectedness (multiple devices, multi-media, multi-networks, multi-persona, and multi-location), and sees Acme as a means to meet the user’s increased expectations of networks. Certainly SIP will continue to increase in popularity as the PSTN wanes, soft/smart devices continue to proliferate, and multi-modal (IM, presence, video) grows.
But the problem with this vision is Oracle isn’t exactly in the business of real time communications. Maybe it wants to be more like its competitors Cisco and SAP that do offer real time UC solutions, but unless they acquire a UC provider or UC solution vendor, I don’t see the synergy. Acme was the leader and founder of the market, but it is under far more competitive pressure.
I’ve seen a few different angles. The VAR guy points to Acme and Microsoft Lync, but I don’t see competitive advantage there that Sonus/NET and Audiocodes don’t offer. Software is eating away at hardware telecoms, but again – this is the story being told by just about every major UC vendor and ironically SBCs are largely sold on dedicated hardware. IT and Telecom are rapidly blending, and that plays well for broad portfolio vendors like Microsoft and Cisco, not Oracle + SBC.
There is one angle I see, but it is very early. WebRTC could very likely grow quickly in 2013, and WebRTC does not use SIP. Therefore, many users will utilize a SIP/WebRTC gateway, and perhaps Oracle sees Acme as a way to drive communications-enabled applications. Basically position the SBC as the UC/PSTN gateway to the web. This type of strategy requires a very bullish short term view on WebRTC adoption or an accretive acquisition to that won’t burn cash while waiting.
I don’t think it was a bad move. I wish the folks at Oracle and Acme a sincere congratulations. The acquisition isn’t bad in any way that I can see, I just don’t see the strategic synergies I’d like to see.