The Oracle juggernaut keeps rolling, picks up Tekelec

Dana Cooperson, Practice Leader, Network Infrastructure

Communications service providers (CSPs) are simultaneously looking for ways to improve service efficiency and customer experience while opening new revenue veins through mining of network assets. These efforts are particularly crucial in spectrum-constrained mobile networks.

Oracle’s pending acquisition of Tekelec furthers its ambitions to provide leadership and a one-stop shop for CSPs looking to build more efficient, intelligent networks while tapping new revenue sources. CSPs will need to weigh the benefits and risks of the integrated solution Oracle is building.

Competing vendors will need to shore up alliances and consider countermoves, especially in the areas of customer and network data analytics and service control.

Oracle bolsters its service and network control capabilities, diving deeper into the bit stream

The race is on between IT-centric and telecom-centric vendors for dominance in tomorrow’s intelligent, analytics-driven networks. Both types of vendors are trying to help CSP customers better manage and monetize their networks and the data they generate.

The Tekelec acquisition further extends Oracle’s move from the communications network sidelines into the network heart. Tekelec will extend Oracle Communications’ network control capabilities, which it initiated with its February Acme Packet acquisition announcement.

Tekelec also allows Oracle to extend its service control solutions by strengthening its policy control capabilities and adding subscriber data management capabilities. In the past, Oracle partnered to provide these capabilities, but by bringing them in-house Oracle will have more opportunity to shape the roadmap and combine the capabilities in a more tightly coupled solution.

Tight integration should extend beyond the app level to include process, data, and metadata – the latter two are key for cross-enterprise analytics and 360-degree views of CSP operations and customers.

One-stop shops versus specialists: CSPs must walk a thin line to try to capture the best of both approaches

Shortly after the Tekelec acquisition was announced, this analyst happened to be talking with a large US-based mobile operator as part of a Big Data analytics research project Ovum is conducting. The operator noted that it relied on analytics specialists in the separate realms of network management, customer usage, and base marketing management.

The spokesman then noted that given acquisitions, within a few years a few vendors would likely be credibly positioned as one-stop analytics shops for CSPs. Finally, and almost wistfully, he noted that “There are definitely cost benefits to a one-stop shop, but you also tend to not get the innovation you’d get from smaller, focused companies. So it’s a fine line.”

The compelling proposition of a one-stop shop for CSP business applications and analytics is the ability to blend mobile analytics with wider business analytics to integrate operational optimization and strategic business planning.

One-stop shopping is definitely Oracle’s game, from what it calls customer engagement (e.g., CRM) through business operations (e.g., billing), service control (e.g., charging and policy control), network control (e.g., signaling and network border control), and end-user applications (e.g., unified communications and Java).

CSPs will need to carefully weigh the cost-benefits of shopping in fewer, bigger stores such as the one Oracle is building. And, as we’ve noted in our research into network infrastructure in 2020, vendors to CSPs will need to decide if they have the wherewithal to attempt a full-service strategy or specialize.

What’s that you hear? It’s the sound of competing vendors reviewing partnerships and planning strategic countermoves

When Oracle announced its Acme acquisition in February, we noted it as a prime example of a strategic move spurred by three key industry trends: (1) the continued blending of telecom and IT; (2) software as the key driver of network capabilities; and (3) the increasing primacy of anytime/anywhere communications.

Expect Oracle’s telecom-focused competitors (Alcatel-Lucent, Huawei, Ericsson, etc.) and its IT-focused competitors (HP, SAP, SAS Institute) to do more strategic soul-searching and, as their financial situation allows, to pursue acquisitions of their own.

Key areas for strategic shoring-up include customer experience management, applications enablement, Big Data analytics, subscriber data management, and network and service control intelligence. Cisco Systems is in a unique position, as both a telecom- and enterprise-focused equipment provider that “gets” IT; specifically, it understands the intrinsic value data holds for enterprises. It has been on an acquisition tear of its own to shore up its mobile/software credentials.

Cisco Systems is this analyst’s pick for the network equipment vendor most likely to try to beat Oracle at the one-stop-shop game.

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DougDuke 杜大哥
11 Apr 2013, 2:59 a.m.

Cisco's challenge as a dominant vendor of telecom equipment is to convince its customers with multi-vendor networks that Cisco can deliver management solutions without conflict of interest. Cisco has failed to do this on a number of previous attempts.