IT managers aren't the only ones struggling with a crush of mobile devices, the public's unending appetite for cloud services and the popularity of the bring your own device (BYOD) trend. Mobile carriers are also feeling the strain.
Cisco, taking a cue from the explosive growth of the smartphone and tablet markets, the steady rise of fast 4G LTE networks and the management challenges that they pose, is snapping up Intucell, a mobile network software company, in a deal valued at $475 million.
Intucell is an Israel-based maker of self-optimizing network software. The startup's technology helps mobile carriers plan and configure their networks and recover from networking hiccups automatically and in real-time with self-healing capabilities. Intucell was founded in 2008 and had raised $9 million from Bessemer Venture Partners and Genesis Partners.
The IT networking giant is betting that as demands on their mobile networks grow, carriers will flock to automated mobile network management and optimization. "The mobile network of the future must be able to scale intelligently to address growing and often unpredictable traffic patterns, while also enabling carriers to generate incremental revenue streams," said Kelly Ahuja, Cisco Service Provider Mobility Group's senior vice president and general manager, in a company statement.
For Cisco, Intucell's tech also provides a way to layer intelligence onto their expanding networking portfolio for mobile telecoms. Last year, Cisco acquired Sunnyvale, Calif.-based Clariden, a network design and traffic management software specialist, for $141 million.
"Through the addition of Intucell's industry-leading SON technology, Cisco's service provider mobility portfolio provides operators with unparalleled network intelligence and the unique ability to not only accommodate exploding network traffic, but to profit from it," added Ahuja.
ISI Group's Brian Marshall and Stephen Patel note that Intucell's software is already proving its worth to an early customer, which also happens to the first U.S. carrier to deploy the software.
According to the analysts, AT&T and Intucell began working together in early 2011. The result is a faster, more resilient mobile network with fewer dropped calls. Thanks to Intucell, AT&&T boasts an estimated 10 percent improvement in call retainability and throughput speeds. Intucell's tech has also helped the mobile service provider reduce network overloading by approximately 15 percent.
These improvements, primarily achieved through software, won't go unnoticed by mobile network operators struggling with a crush of wireless application data and Web traffic, say Marshall and Patel. "We believe management/optimization software for networks is increasing in importance and the acquisition reflects CSCO's [Cisco's] desire to add more software-oriented capabilities," they stated in a research note.
Intucell employees will be transitioned into the IT networking giant's Service Provider Mobility Group. The companies expect the deal to close during Cisco's third quarter, or by April 27, 2013.