10 Game-Changing Networking Acquisitions Of 20104:00 PM EST Fri. Jan. 14, 2011
There weren't quite as many eye-popping, seismic-shift acquisitions in the networking space in 2010 as there were in 2009 -- that, after all, was the year of Avaya-Nortel, Cisco-Tandberg and HP-3Com, among others. But 2010 didn't lack for mergers and acquisitions, and all throughout the year, strategic M&A moves took a number of networking players off the board, raising new hopes and fears in the IT networking and telecom service provider channels.
Here's a look at 10 acquisitions, either closed or pending, from the previous year -- and one this month -- that have kept people talking, and deserve plenty of consideration. In chronological order:
Ah, Palm: an aging mobile phone pioneer struggling for relevance in an Apple and Android world. With slowing momentum and little more than appreciative shrugs for its Palm Pre and Palm Pixi phones, Palm seemed destined for the scrap heap last year, but then HP swooped in, ponying up $1.2 million to acquire it.
HP is attempting to position itself as an end-to-end networking and technology player, and in that regard, it may not be Palm so much as the operating system, webOS, that HP obtained through the acquisition that gets HP closer to the mobile device catbird seat. Tech observers will get a taste of HP's newfound webOS mobile strategy next month, when media gather in San Francisco for a webOS device launch event Feb. 9.
Amidst the nonstop wheeling and dealing in the telecom service provider space last year, the biggest of all the blockbusters was CenturyLink's planned $10.6 billion acquisition of Qwest.
The deal was announced in April and following months of approvals by the various governing bodies who need to bless it, is expected to close in the first half of calendar 2011. At its completion, it'll stand as one of the largest telecommunications deals in decades, and the combined company, of which CenturyLink shareholders will control 50.5 percent, will have a 173,000-mile fiber network in the U.S.
First it was MegaPath and Covad, and then Speakeasy jumped in to create a three-way merger that was billed as the creation of a "next-generation CLEC." Now a single company, known as MegaPath, the combined operations can offer a full portfolio of voice, access, private networking, managed security and services solutions focused on large enteprise, SMB and wholesale accounts.
The best news for channel partners? According to President of Business Markets Bruce Chatterley, MegaPath wants to dramatically up its channel ante and get to 50 percent indirect business within a few years.
It was an eyebrow-raiser at the time, and still is six months later. Nippon Telegraph and Telephone (NTT) announced its intent to acquire global solution provider Dimension Data for $3.3 billion, paving the way for a behemoth, globally-situated IT services and solutions business with huge networking and telecom footprints. The acquisition has not yet closed, but NTT and Dimension Data cleared all potential regulatory hurdles in October.
Distributor Arrow Electronics for years marketed itself as the only enterprise distributor that didn't also sell to end users. But that changed in August, when Arrow was confirmed as the acquirer of national solution provider Shared Technologies, one of the country's top Avaya, Nortel and Siemens VARs and No. 158 on the 2010 VAR500 list.
At the time of the deal's announcement, Arrow insisted that Shared's business model doesn't compete with Arrow's existing enterprise two-tier model, and that Shared would operate as a separate entity within Arrow ECS. How much more of a networking channel player is Arrow now? It remains to be seen.
Cisco is a serial acquirer, and as the networking titan pursues an aggressive strategy around "30 adjacencies" -- that is, various market segments in which it feels it can be a top, influential vendor -- its M&A streak is expected to continue. One of Cisco's most interesting grabs in 2010 was of Arch Rock, the San Francisco-based maker of IP-based wireless network technology for smart grid applications. With smart grid infrastructure and energy management expected to become an increasingly more compelling play for IT professionals, Cisco's place in the smart grid realm should come into sharper focus -- with lucrative opportunities for Cisco VARs not far behind.
It was a big year for scrappy UC player ShoreTel, which, among several major events, gained a new CEO, and made a game-changing acquisition of Agito Networks, dramatically upping its stake in the mobility space.
Agito, founded in 2006, focuses on UC products that can integrate with an enterprise's existing PBX infrastructure to enable voice calls over VoIP connections, reduce calling costs and make international mobile communications less cumbersome. What's especially interesting -- and potentially huge for ShoreTel channel partners looking for flexible mobile UC solutions -- is that ShoreTel is going to keep the Agito technology vendor-agnostic, including PBX and UC support for both ShoreTel systems and those of its many competitors.
It was long-rumored and finally realized: Juniper announced plans to acquire Trapeze Networks for $152 million, giving Juniper an in-house play for the cutthroat, competitive wireless LAN market.
Juniper partners were largely encouraged by the deal, while WLAN competitors scoffed at Juniper's viability in such a crowded space. According to Juniper, however, the acquisition is logical for its growth strategy, and it will continue with a "very specific schedule of communication" to partners, as well as limit the number of Juniper partners able to sell the Trapeze portfolio.
LineSider Technologies, which Cisco picked up near the end of the year, may seem like one of Cisco's more modest acquisitions, but the technology it brings to Cisco certainly isn't.
LineSider, founded in 2005, offers a flagship product called OverDrive, a virtualization platform that offers real-time automation and control of network services. According to Cisco, that means Cisco can offer faster, more efficient provisioning of network services in a virtual environment: a crucial step for enabling flexible cloud computing infrastructure.
Last year was a big one for Skype, which among other highlights hired former Cisco VP Tony Bates as its new CEO, filed a Form S-1 in preparation for an initial public offering, and launched a formal channel program to help it increase mindshare and market share among business VoIP users. Most recently, however, came an acquisition: earlier this month, Skype confirmed it would acquire Qik, the video startup specializing in streaming video on mobile devices. Qik ended 2010 with 5 million users, up from 600,000 only a year ago. That's admirable growth, and with Skype looking to up its exposure both in the mobile device world and the video one, having Qik in its arsenal would seem to kill two birds with one stone.