Just a week ago, tech giant Oracle (Nasdaq: ORCL) and its take-no-prisoners CEO Larry Ellison disclosed that it was buying Morrisville-based Tekelec. But neither company said much at all about the deal, therefore adding to speculation about what job cuts might occur at the Triangle telecommunications and networking technology firm when the deal closes.
But in a conference call later in the week with analysts, Oracle executives made clear that they value the intellectual firepower Tekelec brings to the global giant as it makes the first steps into the worldwide telecom space.
Dana Cooperson, vice president and practice leader for Network Infrastructure at global research firm Ovum, tells The Skinny that while Oracle is concerned about customer overlap it didn’t spend an estimated $1 billion to gut Tekelec. Ovum’s analysts provided WRAL News with a great deal of insight into the deal last week, so we followed up seeking more information.
“They did go out of their way to note how Tekelec was comprised of ‘engaging, talented’ individuals, which bolsters my comments regarding they want the personnel to stick around,” Cooperson explained.
Given that Tekelec has been on a roller coaster the past couple of years with management changes, layoffs, being taken private and now being sold, any reassurance Oracle is sending Tekelec has to be calming the work force.
As is the case with any merger and acquisition, jobs are likely to be lost due to overlap among the joined companies or the need to cut costs or cutting product lines – or a mix of all three.
However, Oracle also is in the process of acquiring another network communications firm, Acme Packet, and while its focus is more on security vs. Tekelec’s emphasis on signalling, the result is a similar list of clients. That could be a challenge to resolve.
Who sells what to whom?
“One item [of concern] is that the overlap in customer base between Oracle, Tekelec, and Acme Packet is very high,” Cooperson says.
“Oracle noted that they all focus on the top 30 service providers worldwide (in their comms practices). Normally vendors go to great pains to note the broadening of their customer bases as part of an acquisition, but this is clearly a deepening of their position in their prime customers through a broadening of the product line.”
By deepening, Oracle is adding a bigger list of products.
Oracle also – agin – stressed Tekelec’s importance, Cooperson adds.
“They did also emphasize the point I made about bringing the assets in house so they could more completely integrate the pieces into a solution.”
So far, that seems to be good news for Tekelec employees.
