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February 06, 2013

Acme Packet and Dell: A Tale of Two Trillions

Telecom and computing are each trillion dollar industries. Actually computing might even be a little higher these days, but not for much longer now that smartphones and tablets are the fastest growing markets around.  

Dell has officially gone private for $24B, while Acme has been acquired by Oracle for $1.7B. To think we knew them when Acme was a startup.   Notice how Dell is reviving itself and Acme Packet is becoming part of something larger. 

What does this mean? It means that convergence is happening.

And who is ready for convergence really? I can make the case that Dell has not been. As a matter of fact, I can make the case that Dell built itself in HP’s image. Now with Microsoft joining in the rescue, we should expect to see a serious revamp. On the Surface :<), this is two companies leaning against each other. However, I have high expectations that Microsoft is going to find a path to success again, and Dell can find the innovation it rarely had in Microsoft’s R&D. Who knows we may even see Dell build some ARM devices. 

Market types think a divesture of the parts makes sense, but I think Microsoft is in Dell to make it so that they can have the Nokia guys work with a partner. The Surface shows the problem Microsoft has had in getting a cohesive vision together as RT is a stop gap while we wait for the real OS for the product. Nokia has been doing okay with the Windows Phone, but the cohesion of devices in the portfolio needs to be better managed. Perhaps Michael can help in the mix. 

The important thing to note here is that Dell is not alone in the dilemma of understanding, “what is the next right move?” “WWSD” - What Would Steve Do…is a phrase a lot of CEOs are asking themselves.

On the other hand, Andy Ory figured out the next right move a while ago. I remember Seamus Hourihan sharing with me that the company was talking about sessions in a different context. The context of what it means to manage data. This was a hard sell to the telco audiences. However, they saw that the carriers were not the only market they needed to support and they chased session traffic where it was growing, in the cloud. 

Our friend Andy Abramson has pointed out that the playing field has just gotten interesting for all the session controller companies.

We are seeing the convergence in all sorts of ways and it’s clear that in transition no one group is going to have all the winners.

For example, Facebook uses computing’s MQTT as its Instant Messaging Protocol.   On the other hand, Google and Mozilla have embraced WebRTC.

What is clear is we are going to see companies that are not sure of the future, ready to revamp while those who have a path are probably acquisition targets.   Regardless, the trillion dollar markets are going to collide. Hopefully to a bigger opportunity.

Edited by Stefanie Mosca

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