Stratus Acquires Emergent Network Solutions for Next-generation Telecom Software and Services

By | September 12, 2006

Stratus Technologies, Inc. of Maynard, Massachusetts announced today the acquisition of Emergent Network Solutions of Allen, Texas, an innovator in advanced telecommunication software and services that enable carriers and service providers to integrate current and emerging network technologies. The purchase amount is $11 million, with provisions for additional performance-based payments.

Emergent’s focus on products and solutions for voice over the Internet (VoIP) and IP Multimedia Subsystem (IMS) builds out Stratus’ strategic business initiative and current solutions for Fixed Mobile Convergence (FMC) and Service Mediation, which enable disparate network technologies to operate together seamlessly. Stratus is committed to offering carriers and service providers interoperability between traditional wire-line networks, mobile and cellular networks, and rapidly growing VoIP and IMS services like those made possible by Emergent. This network-convergence strategy addresses fundamental revenue-generation and subscriber-retention issues confronting telecommunications service providers today. It also strongly positions carriers and service providers to leverage their existing infrastructure investments as they embrace and migrate to emerging network-infrastructure standards in the future.

“The adage that the whole is greater than the sum of its parts applies perfectly well here, for both Emergent and Stratus,” said David J. Laurello, Stratus president and CEO. “Our business strategies blend very well. And because we approach the market from different sides of the convergence paradigm, our engineering expertise, products, channels, and customers also complement each other. I am exceptionally pleased to have Nathan Franzmeier, Emergent’s founder and CEO, and his entire team join the Stratus Technologies family.”

As a result of the acquisition, which closed August 11, all former Emergent employees and contractors have transferred over to Stratus and will continue to operate from Allen, Texas. Nathan Franzmeier will assume the position of vice president, Emerging Network Solutions, a new Stratus business unit, and will report directly to Laurello. In his new position, Franzmeier will have overall responsibility for the combined Stratus and Emergent telecommunications strategy.

Founded in 2001 in the Dallas area, Emergent Network Solutions has approximately 32 employees and contractors. The company has built a global customer base of approximately 130 installations at 100 small-to-medium-sized wire-line carriers through both direct and indirect sales channels. It has approximately 20 resellers in the Americas, Europe and Asia/Pacific region.

“Stratus has excellent standing among the major global carriers and telecommunications equipment providers, as well as significant sales resources in both telecommunications industry and enterprise telephony markets,” said Franzmeier. “This accelerates the exposure of Emergent’s exceptional solutions and specialized services to a much larger segment of the market and broadens market appeal when combined with Stratus’ hardware, software, and solutions.”

The opportunity today in the converged network solutions market is conservatively $2.0 billion according the industry sources, and growing rapidly.

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