Tuesday, April 24, 2007

Motorola to acquire Terayon

Motorola will acquire advanced advertising system company Terayon for $140 million.

This is the latest of a series of acquisitions that Motorola is making to improve its position in both the cable and TelcoTV markets. Advanced advertising is an important emerging area that will become increasingly important.

8 comments:

Ohad said...

MOT has been doing a spectacular job acquring cutting edge technologies for ridiculous prices. with the capabilities of TUTS,TERN and Broadbus integrated into its portfolio, MOT should benefit from the coming network upgrades amongst cables and telcos.

Bob Larribeau said...

Don't forget Motorola's relationship with ECI which shores up its access portfolio.

The major hol in Motorola's IPTV product line is middleware. Minerva is the hot company in this sector right now, especially in the small U.S. telco market that Motorola (Next Level) pioneered five or six years ago.

Ohad said...

Bob,

Perhaps ECI is next on their shopping list? ;)

http://biz.yahoo.com/bw/070425/20070425005398.html?.v=1

It is interesting that you mention MOT's IPTV product line. Do you think a company at their size would rather target small telco operators? I am having trouble understanding how each one of their acquistions fit into their overall strategy. TERN's products will be used mostly in the cable field but also for IPTV. TUTS is pure IPTV, but with an intalled base of small and medium telcos. ECI's cusomers tend to be very big, but MOT would resell their HiFocus to tier-2 and tier-3 operators.

Is there anything in common for all those acquisitions that unites them into a clear strategy?

TIA

Bob Larribeau said...

Ohad,

Interesting connection between Motorol and ECI. I was not aware of it. It probably explains the recent agreement between the two companies.

I think that Motorola is trying to strengthen its position in both cable and IPTV. This is pretty clear on the video side.

Motorola moved into the Telco access market with its acquisitions of Next Level and Quantum bridge. Next Level developed a dominant position in the U.S. small telco IPTV market. Motorola became one of two BPON providers to Verizon. (It now appears that both BPON vendors Motorola and Tellabs may be replaced as Verizon evolves to GPON.)

The Next Level systems were ATM based rather than IP based and are no longer competitive, so Motorola has been losing the U.S. small telco IPTV market to IP DSLAM companies such as Calix and Occam.

Motorola would clearly like to leverage its still large installed base in the small U.S. telcos and the Tut acquisition and the ECI agreement will halp with that.

Motorola has become more aggressive in the global IPTV market. Its acquisition of Kreatel was a great move in that regard.

Bob

Ohad said...

If you look at the installed base of TUTS in the US, a lot of those deploymetns involve the Siemens SURPASS middleware. Do you think MOT would resell the Myrio middleware or do they have another product of which i m not aware?

Looks like Siemens lost its 2 prime head end partners: TUTS and TAT. Which encoders do reckon they will they use going forward?

Bob Larribeau said...

I don't know what Motorola's strategies will be. I discussed this with Tut about a year ago.

At that time Tut was recommending Siemens/Myrio, Minerva, and Kasenna middleware. Minerva appears to have gotten a lot of this business recently.

The two questions here that I am concerned about are whether or not Motorola will be as aggressive in this U.S. small telco market as Tut was. The second question is how interested will Nokia Siemens be in this market.

I expect both Motorola and Nokia Siemens will back off at least a bit.

Ohad said...

yesterday OBAS revealed that they are working with Siemens at their lab. Perhaps this is the reaction for the TUTS acquisition?

Bob Larribeau said...

Optibase has been working hard to get a piece of the U.S. small telco market but has not done nearly as well as Tut.

Optibase's position in this market may have improved significantly. With Motorola acquiring Tut and Skystream now becoming part of Ericsson as part of the Tandberg acquisition, Optibase is the one video encoder startup company that is still vying for this market. If Motorola and Ericsson back off a bit, that should leave more opportunity for Optibase.