Allot's Revenues from 2012 Acquisitions

Allot Communications filled its 20-F form with the SEC (here). The report has some information on the cost and results of Allot's 2012 acquisitions - Ortiva Wireless (here, here) and Oversi (here).

Rumors are that Allot expects the optimization related sales (Ortiva) to recover at the 2nd half of 2013.

• Ortiva - "The Company paid $ 10,816 in cash as consideration for all the shares of Ortiva .. The results of Ortiva's operations have been included in the Company’s consolidated financial statements since the Ortiva acquisition date. Revenues recognized from the Ortiva acquisition date to December 31, 2012 were $ 3,404 [since May 15, 2012]".
   
• Oversi - "The total consideration for the acquisition was $ 17,349, which consisted of $ 16,000 in cash and contingent consideration estimated at fair value of $ 1,349 at the Oversi acquisition date ..  Pursuant to the Oversi SPA, the Company has a contingent liability to pay additional consideration if Oversi reaches a certain threshold of bookings for the year ended December 31, 2012. As of December 31, 2012, the fair value of the contingent consideration was determined to be $ 1,088, to be paid on April 15, 2013, and is presented in other payables and accrued expenses. The change in fair value of the contingent consideration was recorded in general and administrative expenses.
  
  The results of Oversi's operations have been included in the Company consolidated financial statements since September 4, 2012. Revenues recognized from the Oversi acquisition date to December 31, 2012 were $ 1,954".

[ABI]: PCRF/DPI Market to Reach $1.4B in 2013; to be Integrated with Optimization

Aditya Kaul (pictured), practice director, mobile networks, ABI Research estimates ".. the mobile portion of the policy server (PCRF), DPI, and web/video optimization market as a collective whole reach $1.4 billion in 2012 and will grow to $2 billion by end 2013. Of this, more than 70% of the market is standalone DPI and policy server related, which is growing at CAGR of 33% between 2012-17".

“While policy, DPI, and optimization have traditionally had separate ecosystem vendors, there are some indications that these functionalities might get integrated.. Although there is an ongoing debate within the industry about the pros and cons of this integration, the interworking and cooperation of these three functions is necessary to deliver smart mobile traffic monitoring, optimization, and monetization solutions”. [See Allot's recent integration of the acquired video optimization vendors - Ortiva and Oversi - here].

"By 2017, the overall mobile monitoring and optimization market is expected to reach $8 billion, with DPI, policy, and web/video optimization making up 73% of the market, from the current 50% market share. While network monitoring will remain important, the value will shift towards monetizing the traffic, making policy and DPI much more intertwined than they are today, but also be seen as a critical part of mobile infrastructure spend".

A year ago ABI estimated that "In 2016, mobile network operators will spend more than $1.8 billion on web/video optimization, more than $1.2 billion on policy management [this is lower than the previous ABI forecast - see here], more than $1.5 billion on deep packet inspection (DPI)" (here) - i.e total of $4.5B for 2016 compare to the current forecast for 2017 of $5.1B.

The DPI/PCRF market size table was updated (here).

See "Mobile Policy, DPI, and Web/Video Optimization Market To Reach $2 Billion in 2013" - here.

Allot New Video Cache Solution - Availability and Customer Win

 
Allot Communications has updated its product portfolio with MediaSwift-E, which "incorporates caching know-how from the recently acquired Oversi Networks" [here] and replaces the previous product, MediaSwift which was based on the OEM relations with PeerApp (see "Cisco Partners with PeerApp" - here).

"The solution provides 4 to 10 times faster delivery of over-the-top video, saving operators up to 30% on core, transit and backhaul bandwidth required. Its out-of-band deployment architecture enables broadband operators to scale and keep pace with the ever-growing volume of rich-media traffic"

Allot MediaSwift-E maximizes Net Cache Out and a provides a hit ratio of more than 85% on OTT video requests 

The company also announced the ".. the receipt of a large order for the new Allot MediaSwift-E caching solution. The solution incorporates the caching technology from the recently acquired Oversi Networks together with Allot Service Gateway to deliver a high-performance caching product that accelerates media delivery and significantly improves customer quality of experience (QoE). The order is from an existing multi-million dollar APAC fixed operator customer"

See "Allot’s Tier 1 APAC Customer Adds New Allot Caching Solution" - here. 

Allot Integrates Ortiva and Oversi into the Service Gateway

    

During the Q2 results call, in a response to an analyst answer, Rami Hadar, Allot's CEO provided some insight into Allot plans of integrating its recent acquisitions (Ortiva, Oversi) into its main product (Service Gateway).

Allot's ATCA Based
Service Gateway

".. In term of enjoying a head start and integration with platform, you are right to remember that in Ortiva, we were based on ATCA platform and we are already in a process of moving them to our ATCA platform, which is obviously much easier task than if they were doing some kind of a proprietary solution".

"With Oversi, it's a little bit different, if you may. The caching solution has two elements. One is big chunk of storage, and that's going to stay external. No point of putting that into a service gateway, but the control functions and redirecting video traffic and video control messages will be integrated very quickly alongside management. So that's on the platform integration".

See the transcript, by Seeking Alpha, "Allot Communications CEO Discusses Q2 2012 Results - Earnings Call Transcript" - here.

Cache Deployments [169]: Unotel [Brazil] Selected Oversi for its ISPs

Oversi (now part of Allot Communications - here), announced that Brazilian telecom company Unotel has " .. selected OverCache for deployment of OTT caching throughout Brazil .. Unotel has chosen OverCache for its centralized data center, for deployment at its associated ISPs [see plans and cost below] and as an offering to additional operators throughout Brazil".

Unotel Telecom SA, an association of dozens of regional telecom companies in Brazil, offers value added services to over 300 ISPs and 3.5 million corporate and residential users in over 1000 cities.

Marcio Cavalini (pictured), President, Unotel said: "As the largest national company focused on offering IP transit, transport data, video, IP telephony and other value-added services for ISPs, we are committed to offering high availability and unbeatable SLAs. OverCache allows us to keep our competitiveness and to guarantee the best Quality-of-Experience to the users".

See "Unotel and Oversi sign strategic agreement to provide Transparent Caching to dozens of ISPs throughout Brazil" - here.

Allot Buys Oversi for $16M in Cash; Replaces PeerApp OEM

 
Allot Communications announced that "..it has signed a definitive agreement to acquire Oversi Networks, a leading global provider of rich-media caching and content delivery solutions for Internet video and peer-to-peer (P2P) traffic .. Under the terms of the acquisition, Allot will be paying $16 million in cash, as well as up to $5 million based on Oversi's performance during 2012 .. Oversi will contribute approximately $2.0 million in revenues per quarter .. The offering should reach break-even by the first quarter of 2013".

   

Allot is already partnering (OEM) with Oversi's competitor, PeerApp, and offers the MediaSwift caching solution. The reason for the switch maybe found in Rami Hadar (pictured), Allot's President and CEO, quote: ".. Over the past year, we have seen an increase in customer interest in video caching solutions, which made clear to us the critical need for Allot to own a leading solution in this growing market instead of reselling a third-party offering. With our shared vision of enabling service providers to monetize video traffic, we are excited about incorporating another excellent team and product offering into Allot"

See "Allot Communications to Acquire Oversi Networks" - here.

CDN/Cache Convergence: Oversi and Jet-Stream

 
Carrier CDN and OTT transparent caching solution continue to converge (see previous posts on Limelight (here), Ericsson/Akamai (here), PeerApp/EdgeCast (here) and Verivue (here).

Oversi and Jet Stream now offer a joint solution as well. The two vendors announced "a strategic collaboration to provide a converged content delivery solution for network operators .. This new partnership brings together Jet-Stream’s best-in-class CDN technology and Oversi’s solution-of-choice Transparent Caching".

See "Oversi and Jet-Stream Partner to Provide a Converged Content Delivery Solution" - here.

Cache Wins: Oversi Announced its Largest Win Ever

Oversi announced it has ".. been awarded as the winner of the largest project to date, for a nation-wide deployment of Transparent Caching, by a very large operator in LATAM [with its] OverCache™ offers a breakthrough OTT caching and content delivery platform".

David Tolub (pictured), President and CEO, said: “We are proud to have been selected after a rigorous evaluation process that included all transparent caching vendors in the market".

See "Oversi Wins Largest Transparent Caching Project" - here.

Cache Deployments (53): True Internet [Thailand] Uses Bluecoat to Reduce Costs and Improve QoE for Web and Video

         

True Internet, Thailand’s largest ISP with approximately 1.5M subscribers (of which nearly 800,000 in Bangkok Metropolitan Area) must be a paradise for equipment vendors, as it frequently agrees to deploy similar systems from multiple vendors, cooperates very well with the vendors and allows them to mention that in press releases.

3 months ago Oversi announced a cache deployment at True (see "Does True Internet [Thailand] Use Oversi Just to Improve Internet Video QoE?" - here) and now Bluecoat announces that "True Internet .. has deployed Blue Coat^® CacheFlow^® 5000 [here and chart below] appliances to reduce costly international bandwidth consumption, as well as to improve end-user Web experience especially for the delivery of rich Web 2.0 and video content". 

  

See "True Internet Deploys CacheFlow Appliances to Reduce Bandwidth Costs and Improve User Experience for Rich Web 2.0 & Video Content" - here.

True is also using PeerApp - see "True -- Thailand's Largest Internet Service Provider Cuts Bandwidth Costs with New Peer-to-Peer Technology from PeerApp" - here.

This time it is clearly said that caching is used to reduce the usage of costly international bandwidth, and not only in order to improve subscribers’ QoE. Bluecoat explains that "Particularly in high-growth, developing regions such as Latin America, Middle East, Eastern Europe and Southeast Asia, international bandwidth costs can be prohibitive for service providers. In many instances, regional service providers may be paying hundreds or thousands of dollars per megabit per second (Mbps) per month for international IP transit bandwidth."

Dr. Viriya Upatising, CTO of True Internet said “..We face considerable demand for bandwidth, especially as each customer consumes a growing amount of rich media content from such sources as Facebook, MySpace, YouTube, DailyMotion, RapidShare and other sites With international bandwidth still being quite expensive, the CacheFlow appliances have provided a significant remedy for us by helping us manage the operational challenge of adding more users and addressing greater traffic volumes. From our extensive testing of the solution, we have seen how the CacheFlow product consistently delivers high bandwidth savings, while improving the quality of our Internet service to our customers”. Dr. Viriya was also quoted on Oversi's release.

Cache Deployments (38): Does True Internet [Thailand] Use Oversi Just to Improve Internet Video QoE?

 

Oversi announced today that "it has deployed a 100 Gbps Net Cache Out system in True Internet, Thailand's leading Internet Service Provider and one of the fastest growing providers in Asia."

Dr. Viriya Upatising, CTO of True Internet said: "We have been using OverCache^TM [chart below] as our caching system for several years (here) and we are extremely pleased with its performance, reliability and ease of operation. The OverCache system enables us to provide the greatest Internet Video Quality of Experience (QoE) to our customers"

See "Oversi Reaches Industry Milestone – 100 Gbps Net Cache Out Capacity" - here.

Of course, beyond improving the subscribers' QoE, True saves significant bandwidth volumes on its expensive international links.

See also "How to Operate--Triple-Play Comes True" by Dr. Upatising - here - " If we don't contain BT or P2P traffic, just squeeze them down to make them slow, then we could have problems like user churning as well as the growth of the market may not be so high. We have to experiment with a few technologies, like P2P caching, traffic shaper and all these things to balance our operational cost and the customer satisfaction. Once that's done, we manage to control the cost in an effective way"

It seems like "100 Gbps" (capacity in this case, not the Ethernet interface) is a hot PR issue among the caching vendors - see PeerApp's recent announcement: "PeerApp Deploys 100Gbps Intelligent Media Caching Solution" - here.

Related post - "Video Caching Market Finally Growing" - here.

Video Caching Market - Oversi Raises $4.9M

   

Few days ago I posted an article on the video caching market growth (see "Video Caching Market Finally Growing" - here). Today, Oversi, one of the earlier players in this market, announced that : "it has completed a new investment round, totaling US$ 4.9 million, led by Carmel Ventures together with Cisco(R), smac partners and StageOne Ventures"

See "Oversi Raises $4.9 Million of Funding" - here.

David Tolub, Oversi's President and CEO, said: "We have recently won several new strategic accounts, including several large Tier 1 operators. Caching has become a basic requirement for operators wishing to reduce expenses while enhancing QoE (Quality of Experience). Our Out-of-band technology has been endorsed by the industry as the solution of choice for fixed and mobile service providers, and our caching system, OverCacheTM is delivering tens of Gbps of Net Cache Out. This additional funding will allow Oversi to go to the next step in our strategy - enabling fixed and mobile operators to offer assured QoE (Quality of Experience), valuable tiered services and content. I am extremely pleased with this new funding and vote of confidence by our investors."

DPI/QoS Announcements: Juniper VXA Media Flow Engine

    

Juniper announced the "availability of Juniper Networks VXA Series Media Flow Engines, a converged content delivery and caching solution that enables service providers, content publishers and content delivery networks (CDN) to deliver rich media content"

See "Juniper Networks Delivers New VXA Media Flow Engines to Improve the Economics and Experience of Rich Content Delivery" - here.

"Juniper's Media Flow Solution enables customers to Reduce transit traffic and lower CapEx and OpEx .. significantly improves the user experience enabling a TV-like viewing experience even as network conditions fluctuate [and] .. allows service providers to introduce many compelling new content-based services.  The foundation of the Media Flow Solution is Juniper Networks Media Flow Controller, a hierarchical caching software appliance that provides an awareness of content requirements, network conditions and storage infrastructure for optimal caching efficiency and performance ..  Media Flow Controller can be deployed on the VXA Series Media Flow Engines or on general purpose x86 servers"

Offering of caching solutions for service providers (as oppose to CDN providers) is expanding quickly, each with its approach to the problem, but all offering the same benefits to the service provider.

See posting about Bluecoat (here), Huawei (here), PeerApp (here), and about a recent Yankee Group report "CDNs Expand to Mobile Broadband" - here. Other players are Allot and Oversi.

Source: Juniper

Yankee Group: CDNs Expand to Mobile Broadband [Independent Caching OK?]

  

"The market for mobile CDN services has not yet hit its stride, but it will be a key growth area in the future. Carriers and content providers are increasingly looking to CDNs for help with mobile video service products, and CDNs are amping themselves up to be prepared to offer such mobile video-centric services" - concludes Terry Cudmore, from the Yankee Group in a new research "As Mobile Networks Increase in Importance, So Do Mobile CDNs"  - here.

As I do not have access to the report, I can't say if it covers also the independent caching solutions that operators may install at their core networks, such as the solutions offered by Allot (Mediaswift), Bluecoat (here), Huawei (here), Oversi (here) and PeerApp (here). These solutions will cache videos (and shared files) regardless of the content providers, instead of deploying several CDNs each handling specific content.

Caching of shared files presents another advantage to mobile operators - uploads (to off-net users) may be delivered by the cache server, eliminating the need to go to the user's device over the expensive radio network.

DPI Announcements - Blue Coat Introduces Carrier Caching Appliance

 

Bluecoat announced today the Blue Coat® CacheFlow™ Appliance 5000 Series solution, which "Using advanced caching technology, this new appliance helps scale service delivery to meet the burgeoning subscriber demand for online video, large file downloads and other Web 2.0 rich media content while improving subscriber experience".

See full release here.

Bluecoat has a long history of providing caching products to enterprises and service providers (the current product line name, Cacheflow, used to be the company's name 8 years ago), usually supporting caching of web pages content. The new appliance targets the high-volume traffic of video and similar traffic, with carrier class capacity (having 1 and 10GE interfaces).

While caching may improve subscriber experience, it has to be deployed with a DPI/bandwidth management device in order to realize bandwidth savings - otherwise it will just allow subscribers to download more content. For this reason we see a number of partnerships between other caching companies and DPI companies. Some examples come from the two leaders in caching - PeerApp and Oversi.

• PeerApp Announces UltraBand Certified Partner Program (here) - "PeerApp’s first certified partner Allot Communications Ltd. is a leader in IP service optimization and revenue-generating solutions based on deep packet inspection (DPI) technology"
   
• Sandvine And PeerApp Deploy In Five Networks (here) - "The Sandvine-PeerApp integrated content caching solution leverages Sandvine’s Policy Traffic Switch (PTS) hardware, detailed protocol identification capabilities and PeerApp’s expertise in multi-service, multi-protocol caching solution for video and download services.".
  
  Sandvine also lists Oversi as an ecosystem solution partner (here) 

Bluecoat has in-house DPI/QoS products - the result of acquiring Packeteer (the Packetshaper line -here) two years ago. However, this line adresses the enterprise market, due to limited capacity.

The release does not say if P2P file sharing is supported, which is the prime application supported by Oversi an PeerApp. So, either Bluecoat is trying to avoid the legal issues associated with caching copyright protected video and music or they do not support it. Nevertheless, itis still (with YouTube traffic) the main load on ISPs networks and peering links.

So how is Bluecoat going to present a full solution to the market?