Oracle to Acquire Convergin, Eyes IT Platform for Communications Customers

Oracle agrees to acquire Convergin, which makes a J2EE-based Service Broker platform that allows communications companies to manage services across a wide number of networks and applications platforms. Although Oracle ended 2009 in a strong financial position, 2010 will see the results of many of the company's actions from last year, including the rollout of the Middleware 11g platform and its $7.4 billion acquisition of Sun Microsystems.

Oracle announced Feb. 10 that it has agreed to acquire Convergin, which provides network integration software for the communications industry.
In a statement, Oracle said it expects to integrate Convergin's products into its existing software portfolio, allowing "customers with next-generation solutions to address network migration to an all-IP core, significantly reducing integration and hardware costs." At least in theory, the merger would give communications companies a single carrier-grade, standards-based IT platform on which to build their service-delivery capabilities.
Financial terms of the deal were not disclosed. The acquisition is expected to close in the first half of 2010.
Convergin utilizes a J2EE (Java 2 Platform, Enterprise Edition)-based service broker platform that allows communications companies to manage their services across a wide number of networks and varying application platforms.
"As communications service providers transition from legacy telephony networks to next-generation networks, the combination of Oracle and Convergin will accelerate new service innovation while reducing network complexity and cost," Bhaskar Gorti, senior vice president and general manager of Oracle Communications, said in a statement.
Oracle began 2010 in a strong financial position, having closed out the previous year with reported revenues of $5.86 billion and a net income of $1.46 for the last quarter. Sales of new software licenses had risen 2 percent year over year, despite Oracle's own prediction that those particular sales would either be flat or down. But analysts have suggested that Oracle may have difficulties maintaining that strong growth in 2010.
"Experts believe the technology value proposition for additional modules like order management, talent model, etc. [is] not going to drive sales as much as Oracle would like us to believe," Laxmi Poruri, an analyst with Primary Global Research, told eWEEK Dec. 12, "unless there is a more significant turnaround than what we are seeing in terms of total IT [spending]."

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This year will also see at least some of the results from Oracle's larger 2009 initiatives, such as its Middleware 11g platform upgrade, which allows for increased operational insight and automation of an enterprise's middleware stack.
But Oracle's 2010 will likely be dominated by its acquisition of Sun Microsystems, a $7.4 billion deal originally announced in April 2009 that in theory will allow Oracle to fully integrate Java and Solaris into its products. That will contribute to what Oracle's executives have announced as the company's near-term goal: challenging IBM in the systems arena.
"We have a deep interest in the systems business," Oracle CEO Larry Ellison told an audience at the Churchill Club, in San Jose, Calif., in September. "We've already beaten IBM in software. Now we want to beat them in systems."