Oracle Corporation : ORCL finds no love from investors as firm moves deeper into the heart of telecom networks

The race is on between IT-centric and Telecom-centric vendors; "Both are trying to help communications service provider (CSP) customers better manage and monetize their networks and the data they generate," says Dana Cooperson, principal analyst at Ovum.






Cooperson says:

“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.

"Tekelec also focuses on extending its service control solutions, adding policy control and subscriber data management to its list of capabilities.

"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.

According to Cooperson the move provides further evidence of the key trends Ovum highlighted in the wake of the Acme Packet announcement:

(1) the continued blending of telecom and IT;

(2) software as the key driver of network capabilities; and

(3) anytime/anywhere communications. Expect Oracle’s telecom-focused competitors (Alcatel-Lucent, Huawei, Ericsson, etc.) and it’s 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.”

post-financial crisis bounce in telecom network infrastructure vendor results is over

From Ovum’s soon-to-be published analysis of telecom network infrastructure vendor results by Principal Analyst Matt Walker:

“Network infrastructure vendor revenues – across mobile and wireline – declined 6% in 2012. The post-financial crisis bounce seen in many markets in 2010 and 1H11 is a thing of the past.

"With prolonged economic turmoil and top-line revenue stagnation at the carriers, the industry is trying to right-size itself. Vendors slim down, refocus, partner, go private, merge – many options exist, but standing still is not an option. Margins have weakened for network infrastructure vendors in the last several quarters.

"Two beneficiaries of this market are Huawei and ZTE. While they both face political barriers, and ZTE is slimming down, the Chinese market is giving them a lift. Both of China’s big players f ace big risks, though, in software/IT particularly.

"All vendors are facing the rise of software, data centers, and the cloud, true. IT is increasingly being absorbed into communications networks, and big vendors without software/IT strengths may lose out, or be bought. 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.”

Markets: Easter and Cyrpus prompt traders and hedge funds to reduce risk-on positions in commodities

Equities and commodities have come under pressure as investors make a move towards a risk-off position by some traders and funds as Cyprus raises potential for further financial strife in the Eurozone.

"Metals prices should see some form of price recovery after Easter following resolution of the crisis so long as savers do not panic elsewhere," says Johyn Meyer at SP Angel.

There is potential for further European banks to fail if depositors in Italy and Spain withdraw substantial funds

"We do not see European banks as exposed to Cyprus banks, though some Russian institutions might be affected.  ECB loans of Eur9bn to Laiki Bank, which is to be allowed to fail, are transferred to Bank of Cyprus under the agreement," says Meyer.

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