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Adtran/Bluesocket Deal Is A Potential Network Game Changer

Looking to take advantage of what it calls a perfect storm, networking vendor Adtran has bought privately held Bluesocket, which sells wireless network solutions with virtual control, for an undisclosed amount. This acquisition was effective Aug. 4, and includes all intellectual properties, technologies and the established customer base--more than 3,000 in 47 countries. The Bluesocket team and product portfolio will be incorporated into Adtran's Enterprise Networks Division.

The companies say there are three developments that are creating major discontinuities in the networking market: the explosion in 802.11n adoption (by 2015, it will account for more than 90% of access points); the exponential increase in wireless demand (mobile devices sales were up 16%, to 428.7 million units, in the second quarter, according to Gartner); and the ability of cloud virtualization and WLAN delivery to make controller-based implementations obsolete. Throw in sustainability and the ability to reduce power by 80%, and the only thing holding back the new entity is the ability to execute, notes Zeus Kerravala, senior VP of research, Yankee Group, in a blog.

"Because of mobility, consumerization and device evolution, we're clearly trending toward wireless as the primary network, which is creating another transition point in the industry." He believes that market share change happens only at points of market transition, and that this shift to wireless as the primary network creates a great opportunity for vendors in the wireless LAN space with alternative solutions.

"So now for Adtran to take advantage of this new asset, they'll need to step on the gas and be a lot more edgy and marketing-focused than they have in the past," Kerravala wrote. Adtran is a very well-run company, he says, but its marketing prowess, particularly on the enterprise side, is somewhat limited. He says he doesn't expect the company to change its marketing roots overnight, so he suggests that a good interim step would be to work with the likes of Microsoft, Citrix and VMware to build demonstrable case studies of how the Bluesocket solution provides a distinct benefit for things like VoIP, video and desktop virtualization. "Bold move for Adtran, now it's time to go execute."

A month ago, Adtran reported sales up 23% year-over-year, to $184,227,000 for the second quarter, while net income increased 33%, to $36,943,000. By acquiring Bluesocket, it gets to tap into both the wireless and expected converged network markets, says Adtran's Gary Bolton, VP of global marketing. He says they believe the wireless and wireline networks must be combined into one, and because moving to wireless means users will need to look at new solutions, this puts the new combined entity in an enviable position.

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