Nine building-blocks in Ericsson´s aquisitions strategy
[First published 26 August 1999]
Ericsson is filling out its product portfolio through acquisitions. Following is a presentation of some of the important building-blocks in Ericsson´s aquisitions strategy.
Mariposa Technology Inc. (JUNE 1998) As part-owner of Mariposa Technology Inc., Ericsson can use the U.S. company's solutions for voice/data access over ATM networks. By combining voice and data traffic, operators can reduce costs for data-access lines, etc.
The partnership strengthens Ericsson's position in the rapidly growing market for ATM access.
Mariposa was founded in Petaluma, California, in 1997, and has slightly more than 50 employees.
ACC (SEPTEMBER 1998) In September last year, Ericsson purchased U.S. datacom company ACC – Advanced Computer Communications – from the Canadian company Newbridge. The company is based in California and was founded in June 1991.
ACC is a leading supplier of access equipment, such as routers and concentrators, and was involved in this area at an early stage.
The access market is one of the largest and fastest growing areas of the datacom industry. By acquiring ACC, Ericsson obtains the expertise necessary to develop and capture share in the important Internet access market.
The company's founders have 30 years' experience of technical development work in datacom and the Internet. ACC currently has about 200 employees and is a key unit of the Datacom Networks and IP Solutions business unit.
Juniper Networks (MARCH 1999) U.S. company Juniper manufactures high-speed routers. Together with Cisco, it dominates the relatively new market in gigabit routers. Through partial ownership of Juniper, Ericsson is able to offer solutions, in this area as well.
A distribution agreement allows Ericsson to sell Juniper's data switch, the M40 Internet backbone router, as an integrated component of Ericsson systems.
Juniper has about 270 employees and its head office is located in Mountain View, California.
Qualcomm (MARCH 1999) Last spring, Ericsson purchased U.S. mobile telecom supplier Qualcomm's infrastructure division, which develops and manufactures CDMA systems. This completes Ericsson's product portfolio, which now encompasses all current digital cellular systems and development of the third-generation wireless system, 3G.
The new CDMA-systems business unit has 1,300 employees, most of whom are based in San Diego, California. Research and development operations, involving 150 employees, are located in Boulder, Colorado. The business unit develops products and services for today's narrowband cdmaOne systems (IS-95) and the next generation, the Multicarrier cdma2000 systems.
Operators worldwide are expected to invest a total of USD 9.5 billion in CDMA systems in 1999, corresponding to 25 percent of the year's total investments in wireless systems.
Torrent Networking Technologies (APRIL 1999) Torrent manufactures high-capacity routers that concentrate a large number of lines to the backbone. These routers will play a key role in both IP and ATM-based networks.
This company's products round out Ericsson's product portfolio in high-capacity network products, making Ericsson a key player in the IP area. The purchase increases Ericsson's ability to offer complete data network solutions.
Torrent was formed in 1996 and currently has about 80 employees. The company is now included in the Datacom Networks and IP Solutions business unit. Torrent retains its head office in Spring Valley, Maryland.
TouchWave (APRIL 1999) Ericsson spent a few months actively seeking a company with expertise in both voice telephony and data networks. It chose TouchWave, based in Silicon Valley.
The company, now called WebCom, has been in existence for three years and has 27 employees. It develops Internet solutions for small and medium-size businesses, and specializes in IP telephony. Its WebSwitch product enables smaller businesses to use their existing data networks for telephony as well.
With this purchase, Ericsson is in a better position to offer IP telephony and increases its chances of taking market shares in the U.S. and Japan
WebCom is a product unit within the Enterprise Solutions business segment.
Oz.com (JUNE 1999) In June, after a period of cooperation, Ericsson became a partner in Oz.com, which develops Internet software.
The cooperation has already resulted in an advanced Internet portal offering simple access to Internet communication. The investment in Oz.com strengthens Ericsson's role in the creation of voice-over-IP and other datacom services.
Oz.com's head office is in San Francisco, but many of the over 90 employees are based in Reykjavik and Stockholm.
Saraïde.com (JUNE 1999) At the beginning of the summer, Ericsson announced it would purchase an interest in U.S. company Saraïde.com.
Saraïde is a newly started company that focuses on services in the area where wirelesw and the Internet meet. For example, it adapts web services such as news, stock prices, and so on, to work with cellphones and WAP terminals.
Saraïde targets operators, who then market the services to consumers, and is thus very much a service company. Saraïde currently has 150 employees in Ottawa, Canada and San Francisco and Dallas in the U.S., as well as sales offices in Europe. Telebit (JUNE 1999) Danish company Telebit is among the leaders in routers for robust wireless IP networks. Its products are based on both the current Internet protocol and that of the next generation, IP version 6 (IPv6).
Over the next two years, Ericsson will invest USD 30 million in Telebit. The company employs about 60 people, and has its head office in Viby outside Århus on the Jutland peninsula of Denmark.
The investment is strategic in that it quickly provides Ericsson with real-time routers and expertise on IPv6. The protocol is an essential prerequisite for creating IP addresses for all users when the market for wireless Internet begins to heat up. IPv6 will also make it easier to implement new wireless networks.
Written by Nils Sundström
nils.sundstrom@lme.ericsson.se
26 August 1999 |
