Acme Packet CEO on Covergence acquisition

Acme Packet’s $23-million acquisition of Covergence – both announced and closed today – gives Acme Packet (NASDAQ:APKT) a quick jump in the enterprise market for session border controllers (SBCs) to add to its existing base in the service provider market. And Covergence’s software-only SBC gives Acme a particular foothold in the low end of the enterprise market.

While only about 10% of Acme’s current business comes from enterprises (and that number may be misleading because Acme’s service provider clients serve enterprises as well), Covergence had been targeting that base aggressively at least since its new CEO took over last summer.

“We’ve done very well in the enterprise market,” Andy Ory, Acme Packet’s chief executive officer and cofounder, told Telephony today. “But it’s hard for a company to maintain more than one focus and to cultivate a second focus organically. When I looked out in the market, I saw three companies that could credibly project mindshare about SBCs at the enterprise: Acme, Covergence and Cisco. For us to take a company with a similar technology, a similar market, a similar geography and put them into our company in a matter of 72 hours — in 72 hours, it will all be in Burlington –- we’ll have a very strong second focus in this company: to really lead in SBC in the enterprise.”

In terms of Covergence’s products and technology, Ory said, “We like their ability to run a software-only SBC. We like that they have autoconfiguration capabilities and graphical user interfaces. We also like a lot of our signaling capabilities, and we like our ability to manufacture purpose-built products at a lower cost than they would be able to do. There are definitely ways we can cross-pollinate the two efforts.”

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