Femtocell Opinion, comment and reviews

RadiSys acquires femtocell software supplier Continuous Computing – What are the Implications?

Radisys LogoWe don't normally publish interviews with the same people in a short space of time, but the surprise announcement of RadiSys purchasing Continuous Computing was too good to miss. Here, Manish Singh, VP of Product Line Management at Continuous Computing, answers some popular questions on the reasons behind the acquisition, explains who will be running the new combined business and the impact it will have on their customers – especially those using Trillium software in their femtocell products today.

Continuous Computing acquired by RadiSys

A definitive agreement was signed on 3 May. The deal is under regulatory review at the moment and expected to close near the end of June.

RadiSys is a publicly listed company (NASDAQ: RSYS), which manufactures ATCA (Advanced Telecommunications Computing Architecture) hardware platforms and IP Media Servers for the telecom, military/aero and medical markets. ATCA platforms are industry standard "blade server" boxes especially designed to meet the high reliability and high performance requirements of the communications industry. They are the underlying platforms being used to build telecom switches, routers and media servers at lower cost and higher capacity than before. RadiSys has grown its business to around $300 million/annum and is a market leader in both ATCA and IP Media Servers.

Continuous Computing is an integrated systems product company specialising in ATCA hardware platforms and Trillium software protocol stacks. Its Trillium product line has been extended and "battle hardened" over 20 years,  used by hundreds of network equipment providers, both large and small. Continuous Computing claim some 30 vendors have bought their stacks for use in 3G femtocell designs and they boast over 20 LTE customer wins, although it has to be said that several of the earlier pioneering femtocell vendors instead chose to write their own software.

Why would RadiSys make this purchase?

Both companies share a similar vision of the market and have a common target customer profile albeit with very little current customer overlap. Both use ATCA as the same underlying bladed hardware platform technology. Where RadiSys has developed a broad range of platforms for the Central Office (i.e. telephone/data switching centres) and military markets, Continuous Computing has developed hardware and software specialised for high end processing such as DPI (Deep Packet Inspection) as well as application-optimised LTE and Femtocell products. This means the companies share a complementary product portfolio and will continue to target high end integrated platform opportunities.

Who will run the new business?

Mike Dagenais, the President and CEO of Continuous Computing, will become the new CEO of RadiSys. Nearly all of the management team at Continuous Computing will also join the new executive team of the combined company.

Will software-only customers lose out?

Absolutely not. Continuous Computing has built a profitable business on the back of well proven products and meeting diverse customer needs. Rather than draw back from this, the deal brings scale and the confidence of a publicly listed company together with a wider range of solutions to existing customers. RadiSys very much values the Trillium software assets, especially for wireless.

Will this expand the range of femtocell products?

RadiSys already has customers who have used ATCA to develop Security Gateways and Femtocell Gateways – there are even products for the EPC (Evolved Packet Core) for LTE. This will expand the range to include reference designs for the entire Femtocell Core Network – pretty much everything apart from the femtocell access points themselves. We'll leave that to the various specialist chip vendors and their eco-systems to continue to lead on that.

Who are your target customers?

Our customers are the NEPs (Network Equipment Providers), such as Alcatel-Lucent, Allot, Cisco, Genband, Motorola, NEC, Sumitomo and many tier 2/3 vendors. We don't compete with these companies and won't be selling directly to the network operators. Our value proposition is to help customers get to market faster and with less risk and investment than if they were to develop and integrate platforms and protocol software themselves.

RadiSys is a market leader in ATCA, and we foresee many vibrant opportunities continuing to grow rapidly. No other company can provide the combination of software and hardware in our portfolio.

I should note that we have a growing professional services arm too, with centres in Bangalore/India and Shenzhen/China. This isn't a "bodyshop" operation and we have no desire for it to be. Instead we provide expertise and customisation in our niche for customers, such as LTE, Femtocell and DPI applications. It's an area of the business we expect to continue to grow, but we don't intend to compete on the same scale as the larger System Integrators – indeed we'll continue to partner with them for the larger projects. For example, we are working with Wipro, the Indian System Integrator, on a joint project for SIPTO. We don't try to do everything ourselves, and prefer to work with partners where it is mutually beneficial.

How important are standards for the new business?

They're essential. Both companies have been very involved in defining the ATCA standards, with a strong participation at bodies such as PICMG, SCOPE, CP-TA and SA Forum. Our current focus is on the latest high speed 40 Gigabit ATCA platforms, with a roadmap to 100Gbit ATCA around 2012/13. Continuous Computing has also been active in the Femto Forum and at 3GPP for 3G and LTE basestations and core network infrastructure.

We'll continue to be present and actively participate in these industry bodies, which also help us to stay ahead of the curve in our product R&D activities.

Can you summarise the new combined company's strategy in a few sentences?

In many ways it's going to be "business as usual", because we will be addressing the same markets, with the same products and the same leaders – both companies had a very similar approach, so the union is pretty seamless.

That means we'll continue to:

  • Focus on the emerging LTE, Femtocell and DPI markets
  • Invest in LTE femtocell product R&D
  • Work closely with partners and the ecosystem
  • Support our customers around the globe

We're not standing still either, and are planning to make some exciting announcements at Femtocell World Summit at the end of June 2011. Stay tuned and watch this space for more info!

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