Oracle (NASDAQ:ORCL) has entered into an agreement to acquire Acme Packet (NASDAQ:APKT), a leading provider of voice, data and unified communications services, for $1.7 billion or $29.25 per share. Acme Packet’s solutions are currently deployed by more than 1,900 service providers and enterprises all over the world, including 89 of the world’s top 100 communication companies. This acquisition will boost Oracle’s communication services portfolio. Acme Packet’s software basically integrates phone systems into the technology infrastructure of a company which can then be used to transmit and manage phone calls using the same technology as Internet communications. This acquisition is likely a push by Oracle into the software defined networking market. 
- Oracle Q2 Earnings: Past Bookings Boost Cloud Revenues; No Respite for On-Premise Business
- Oracle’s Cloud Growth Likely Continued in Q2, But Will It Be Enough?
- Oracle Has Grand Plans For Cloud Computing – But Is It Too Late To The Party?
- Oracle Earnings: Rapid Growth In Cloud Offset By Weak On-Premise Business
- Aggressive Selling Tactics Likely to Have Lifted Oracle’s Cloud Revenues in Q1, But at What Cost?
- Can Oracle’s Expansion Plans in China Overcome Nationalistic Tendencies and Heavy Competition?
Software Defined Networking
Networking giants like Cisco and Juniper Networks dominate the software defined networking space with virtualization leader VMware making an entry into the space as well. Acme Packet’s software is key in Oracle’s plan for this market, and we can expect Oracle to add this feature into appliances running on Oracle’s existing line of Sun computers. Oracle is expected to build a new line of networking equipment running on Sun servers with Acme Packet’s software as an integral part of the system.  This market is a growth opportunity for Oracle as the software defined networking market is poised to become a $2 billion market by 2016, according to IDC.
We expect these acquisitions to drive Oracle’s cloud business in the future, and we currently have a $40 Trefis price estimate for Oracle, which currently stands nearly 10% above its current market price. Database, middleware and application software accounts for nearly 80% of its value, while enterprise server and storage hardware accounts for more than 10%.Notes: