Oracle makes Tekelec acquisition

26 March 2013 | Mitch Sayers

ICT technology company Oracle is to takeover vendor Tekelec for an undisclosed fee.

The takeover of California-based Tekelec is thought to be part of Oracle’s strategy to profit from the increasing proliferation of smartphones and tablet computers.

Oracle has already expanded its core business by delivering software through cloud-based computing and has already purchased telecom gear maker, Acme Packet, this year.

It also acquired network-appliance maker, Xsigo Systems, last year in a bid to increase its data centre portfolio.

A consortium of investors attempted a take-over of Tekelec in July 2011 and valued the company at $761 million.

Dana Cooperson, principal analyst at Ovum, said the acquisition, on Oracle’s part, represents movements to help customers manage networks and the data they generate.

“This acquisition further extends Oracle’s move into the heart of telecom networks. Tekelec will extend Oracle Communication’s network control capabilities, which it also bolstered with its February announcement to acquire Acme Packet," she commented.

“Oracle has in the past partnered to provide these capabilities, but by bringing them in-house it will have more opportunity to shape the roadmap and combine the capabilities in a more tightly-coupled solution.”

The independent analyst also believes this deal represents the increasing trend to merge IT and telecoms companies, where software will represent the key driver of network capabilities and the expansion of anytime, anywhere communications.

Cooperson said Oracle’s rivals could also follow a similar strategy: “Expect Oracle’s telecom-focussed competitors and its IT-focussed competitors to do more strategic soul-searching and, as their financial situation allows, to pursue acquisitions of their own."

Analyst Matt Walker commented: “While big mergers are hard to absorb, Oracle’s Acme Packet deal is a start; more telecom-IT crossover is coming, as witnessed by Oracle’s Tekelec plans.”

Both companies have not yet confirmed the deal, but chief executive at Oracle, Larry Ellison, told analysts earlier this month of the company’s commitment to “be the primary technology provider to the telecommunications industry by owning products that address networks as well as management."