When Nokia (NYSE:NOK) announced that it would be acquiring Alcatel-Lucent (NYSE:ALU), a curious thing happened: Both stocks fell. 

This sent a bad signal that large investors in both companies didn't like the deal. It's also extremely rare. The typical pattern in a public-market acquisition is for the shares of the acquiree to rise. The Boston Consulting Group says the historical average premium for the acquired company is 34%. So what gives?

A big factor in the selling of shares after the deal was Nokia investors, according to some sources. Many of the Nokia shareholders were interested in owning Nokia for the intellectual property benefits of Nokia's Advanced Technologies divions, which has been talked about as a spinoff. Another telecom equipment merger didn't do much for them. 

"Many of the people that owned NOK only cared about intellectual property licensing revenues and the bull case that NOK can get more Chinese handset players to pay it," said Michael Genovese, Managing Director at MKM Partners, when I inquired by email. "They don't feel great about telecom equipment so they are getting out of the stock."

Nokia's shares have been choppy for months and fell immediately following the deal.

Alcatel-Lucent's shares popped 20% on Tuesday in anticipation of the deal, but investors immediately sold and it closed lower on Thursday than its price on Monday.

This entry was posted on Friday, April 17, 2015 at 14:18 pm and is filed under Mobile, Infrastructure & SDN, Investing.
Keywords: M&A, Nokia, Alcatel-Lucent, Nokialu, Stocks

(Warning: Disturbing and potentially offensive analysis of the telco hardware business ahead -- spanning four entire pages! Sedatives or perhaps stimulants may be needed, depending on whom you work for.)  

On Wednesday morning, April 15, which has the distinction of being U.S. Federal Tax Day, the 105th day in the Gregorian Calendar, as well as the anniversay of the Battle of Formigny (1450), Alcatel-Lucent (NYSE: ALU), which was once part of a company based in New Jersey but is now based in France, announced it will now become part of Nokia (NYSE: NOK) in Finland.

The deal is valued at $16.5 billion. What do the hard-working folks and shareholders at Alcatel-Lucent get in exchange? They gain 0.55 shares of newly minted Nokia stock. Shares of both companies went down. Yes, just another day in telco land. And all very predictable. AlcaNokiaLunacy. 

There's a lot of breathless analysis being written about what this deal means (at least in one other blog, somewhere), but let's face it: It's a snoozer. A snoozer for losers. These companies -- and their combination -- represent a fraction of the value they once had. The deal has virtually no premium for Alcatel shareholders. It's not creating value.

This entry was posted on Wednesday, April 15, 2015 at 22:04 pm and is filed under .
Keywords: M&A, Alcatel-Lucent, Carly Fiorina, Nokia, Telecom Equipment, SDN, Routers

It's happening! Two large organizations supporting service-provider technology efforts, the MEF and the TM Forum, have agreed to collaborate on programs to push new technology for orchestrating and coordinating dynamic services in networks. 

This has been a broad topic of discussion in the service-provider industry, as large global operators struggle with the many new standards associated with Network Functions Virtualization (NFV), Lifecycle Service Orchestration (LSO), and Software Defined Networking (SDN) -- and how they can fit together to deliver a more open, streamlined way of delivering services.  

The MEF and TM Forum's collaboration will include coordination on NFV, LSO, and NFV work streams; a proof of concept demonstration at the TM Live event in Nice, France, in June; and the MEF's use of TM Forum’s Digital Services Toolkit. You can read more about it from the TM Forum, here

This entry was posted on Tuesday, April 14, 2015 at 17:09 pm and is filed under Mobile, Infrastructure & SDN, Applications.
Keywords: LSO, MEF, TM Forum, OSS

Illumio today announced it has raised a $100 million investment round from big-name investors to pursue its security solutions for virtualized environments. 

The company will use the money to scale the development and sales of its Adaptive Security Platform (ASP), which targets application-level security in the cloud. Illumio's software is designed to monitor the security of traffic flows inside of specific application workflows, and follow them if they are moved in the cloud. 

The investors include a who's who list of top Silicon Valley venture capital firms and individuals. Participating in the round are new investors BlackRock Funds and Accel Partners, joined by existing venture investors Formation 8, Andreessen Horowitz, and General Catalyst. Also participating are Microsoft Chairman John W. Thompson, Salesforce CEO Marc Benioff, and Yahoo co-founder Jerry Yang. 

The company, which was only founded in 2013, already has big-name customers including Morgan Stanley, Plantronics, NTT, and Creative Artists Agency (CAA).

This entry was posted on Tuesday, April 14, 2015 at 14:03 pm and is filed under Infrastructure & SDN, Applications.
Keywords: Cloud Security, Security, Virtualization, Illumio

Network Functions Virtualization (NFV) is gaining traction in mobile networks, and mobile infrastructure startup Affirmed Networks is emerging as one of the leaders.

Acton, Mass.-based Affirmed focuses on virtualized infrastructure for mobile Evolved Packet Core (EPC), the gear needed for mobile data networks at 3G, 4G, and beyond. It has closed a number of deals in the first quarter of 2015 to bring its customer count to 23. At least four of Affirmed's customers are so-called "Tier 1" (large) service providers, including AT&T and S. Korea's LG U+. Other significant customers include Transatel, based in France, and Elephant Talk, an international provider based in New York.  

Affirmed made a big splash when it made AT&T's list of Domain 2.0 vendors in 2013. This was the list of technology suppliers that AT&T announced it was working with on its next-generation Software Defined Networking (SDN) platforms. 

This entry was posted on Monday, April 13, 2015 at 12:11 pm and is filed under Mobile, Infrastructure & SDN, M2M.
Keywords: Affirmed Networks, EPC, Mobile, Mobile Data, AT&T, LG U+

Silicon Motion Technology Corporation (Nasdaq: SIMO), one of the stocks in the Rayno Model Portfolio for 2015 (currently up 19%), blasted off to a new all-time high today on bullish projections for earnings. 

Shares of SIMO stock are up about $5 (18%) for the week after the company said it expects results to come in at the high end of guidance. Yesterday shares gapped up about $2 (7%) and have risen another $1.50 (3%) in trading today to $31.96.

This entry was posted on Thursday, April 09, 2015 at 15:12 pm and is filed under Mobile, Investing.
Keywords: Silicon Motion, SIMO, Mobile, NAND

There's been a lot of chatter about potential consolidation in the optical sector. Infinera (Nasdaq: INFN) is getting the ball rolling by buying Swedish metro optical firm Transmode (ST: TRMO). 

This morning Infinera announced that it had made an offer to buy Transmode in a deal that combines $96 million in cash plus a stock swap equivalent to 4.7 Infinera shares for every 10 shares of Transmode, valued at approximately $350 million. The Board of Directors of Transmode has unanimously accepted Infinera's offer. 

Today in European trading, Transmode shares, which trade on the Stockholm exchange, were up 15% on news of the deal, trading at 115 SEK (US$13). Infinera shares were trading up $1.07 (5.5%) to $20.50 in pre-market trading this morning.

This entry was posted on Thursday, April 09, 2015 at 12:51 pm and is filed under Infrastructure & SDN, Applications, Investing.
Keywords: Metro Optical, Optical Networking, Infinera, Transmode, M&A

The white-box world is growing in influence, so it's time to learn about what applications and use cases can take it to the next level. We'll be covering this again on our regular #whitebox social chat event on April 15 at 1:00 p.m. EDT / 10:00 a.m. PDT. 

As we've profiled on The Rayno Report, the white box movement is an important part of Software-Defined Networking (SDN) and Network Functions Virtualization (NFV). A white box is an open, commodity hardware platform that can support both server and network switching applications using merchant silicon. 

This entry was posted on Tuesday, April 07, 2015 at 15:24 pm and is filed under Infrastructure & SDN, Applications.
Keywords: White Boxes, White Box Switches, Pica8, HP, Dell

Security is emerging as one of Software Defined Networking's most important applications. In fact, it has the potential to combat the surging threat of cyber attacks on cloud services.

Cloud security threats are more prominent than ever, and they represent an important challenge to modern IT departments. You can check the headlines to see that prominent data breaches at Anthem Healthcare, eBay, Home Depot, JPMorgan Chase, and Target have amounted to 400 million records and credit-card accounts being compromised. Dig deeper, and you see that the entire security architecture may be flawed: Nobody has a way to monitor the cloud for security threats in real-time.

Enter SDN. After years of attacking IT security threats with point solutions -- firewalls, virus scanners, and intrusion detection systems -- SDN promises to integrate these approaches into living, breathing security applications that can scan and respond to all cloud network threats, in real-time. 

This entry was posted on Thursday, April 02, 2015 at 16:37 pm and is filed under Infrastructure & SDN, Applications, Bozeman Biz.
Keywords: Security, NFV, DoS, SDN, Hoplite, Pluribus Networks, InMon, Cyber Security

The Rayno Report held another one of our social events on CrowdChat, LinkedIn, and Twitter on March 24. The topic was #sdwan, or Software-defined WAN (SD WAN). The event covered the emergence of the SD WAN technology, or Cloud WAN as I like to call it, which seeks to simplify WAN services by moving them to the cloud. 

The emergence of the SD WAN, highlighted in our "Future of Cloud WAN" report (subscription required), is driving the need for virtualized Customer Premises Equipment (CPE) and Web provisioning of enterprise WAN services. This means that just about any enterprise WAN service requiring a specialized hardware appliance could be moved into the cloud as a software service.

This entry was posted on Tuesday, March 31, 2015 at 22:51 pm and is filed under .
Keywords: SD WAN, Cloud WAN, WAN Optimization, DNS, VeloCloud, Hoplite Industries
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Freshdesk Lands $50,000,000 New Funding Round
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  • Type: Venture Equity
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MyTime Secures $9,300,000 Series B Funding
  • Company: MyTime
  • Description: MyTime is the convenient new way to find and book open appointments online. We let you book appointments for everything on your to-do list, from Acupuncture to Yoga instruction, all in one place. We also give you access to third-party ratings and reviews right on our site.
  • Website: www.mytime.com
  • Type: Venture Equity
  • Amount: $9,300,000
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Vessel Receives $57,500,000 New Funding Round
  • Company: Vessel
  • Description: We've been busy building a service whose mission is to delight consumers and content creators alike. Though we still have more work to do at Vessel, we want to share this brief update and reach out to the creator community. If you are a content creator, particularly a video content creator, we should talk!
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  • Type: Venture Equity
  • Amount: $57,500,000
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