Notes on the Sonus-Atreus deal

I have not been able to post many blogs lately … totally engrossed in the 9th annual VoIP industry report which I am trying to get published within the next few days. One of the bits I missed on this week was Atreus acquisition by Sonus. I am posting a few notes below:

Is this a good move from Sonus?

Sonus has been working with best of the breed providers for a while. They understand value of a ‘solutions sale’ rather than just the ‘systems sale’. With a solutions sale there is usually quite a bit of money associated in form of professional services. Almost every Atreus deployment requires a significant amount of customization which generates services revenue. There is an increasing focus on services revenue component by large vendors.

Will this acquisition result in new accounts for Sonus? What are the chances of this acquisition getting Sonus inside someone like Telus and KPN?This deal does not help Sonus sell more. It eases the delivery for them. If you bring in OSS pre-integrated that speeds up pace of deployment. The causal link is more like since-we-have-Sonus-why-not-implement-Atreus rather than since-we-have-Atreus-why-not-implement-Sonus! Having said that, an acquisition can sometimes be orchestrated by a customer. By the way, pre-integrated OSS also helps recognize revenues quicker from a switch manufacturer’s point of view. “Since the deployment is done, can we bill you now?”

The capabilities of Atreus solution

It is supposed to be an impressive solution. The focus has been first tier customers from the beginning which resonates well with Sonus strategy. Atreus initially built their product inside client software, which they have now migrated to a standard web browser. Unless it has happened recently, the solution does not provide an API itself.

How much did they pay?

I am told under $30m. Sonus stock price is a bit depressed right now. So $25m or $30m now could be a lot 2 years from now if it is a stock deal.

P.S. Encouraging news for VoIP focused OSS companies such as Ensim/Telegea, Sigma Systems, VoIP Logic and others.