This morning Oracleannounced, that it has entered into an agreement to acquireTekelec, a leading provider of network signaling, policy control, and subscriber data management solutions to communications companies. Terms where not disclosed, but Tekelec was taken private last year by a number of equity investors, under the lead of Siris Capital Group, then valued at 780M US$.
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In modern IMS networks the SIP protocol is used for VoIP and video-conferencing, the diameter protocol is powering the triple A of Authentication, Authorization and Accounting, for mobile networks. Both protocols meet in modern mobile networks: When a smartphone is used for a Skype video call - while the load of that video is going over SIP, the administration of all the data is going through the diameter protocol.
Due to the chattiness of mobile devices, the expectation is that diameter protocol traffic will be 2-3 times higher than mobile data growth, which by itself is of course growing dramatically.
Who is Tekelec?
Tekelec has been around since a long time, originally started in Europe, incorporated in the USA in 1971 and since then going from test equipment and hardware to software. Most recently the company has been losing money at the rate of 30M US$ in the last 15 months. It is lead by telco veterans who looks like have turned around the company by focusing on diameter signalling. That's the signalling growth you are aiding with when using a smartphone over an LTE / 4G network.
Tekelec has also been smart to build more value added services on top of the diameter signalling, with subscriber managment, policy management and the not-to-be missed intelligence solution on top of the data packets.
Oracle isn't wasting time
It's less than 7 weeks ago that Oracle acquired ACME Packets and with that got involved in the whole signalling market. ACME packets provided session border protocol tools - and Tekelec provides the same - only for diameter signalling.In modern IMS networks the SIP protocol is used for VoIP and video-conferencing, the diameter protocol is powering the triple A of Authentication, Authorization and Accounting, for mobile networks. Both protocols meet in modern mobile networks: When a smartphone is used for a Skype video call - while the load of that video is going over SIP, the administration of all the data is going through the diameter protocol.
Due to the chattiness of mobile devices, the expectation is that diameter protocol traffic will be 2-3 times higher than mobile data growth, which by itself is of course growing dramatically.
The engineered system is getting more powerful
In my post about Oracle's ACME Packets acquisition I dared to predict that Oracle will bring to market an engineered system dedicated for Telcos, naming if ExaNetNet (in allusion to the ACME products). That option gets even more likely, though the naming will now be something like ExaProtocol or similar. Remember that at some point in the not to distant past, Sun owned a large chunk of telecom protocol equipment.
MyPOV
Oracle is shrewdly expanding their value proposition to the Communications Industry by leveraging the mobile (Tekelec) and overall data (ACME Packets) explosion. And while these acquisitions run all under the banner of Bhaskar Gorti's Telco Unit, they will equally benefit Oracle's cloud offerings. At the end of the day - if the packets get routed faster and more efficiently on a telco server - or an Oracle cloud server - they don't really care. Oracle will be in a good position to make money from either of them.