Company still has $140 million in cash to invest
Ixia CEO Atul Bhatnagar has told Mobile Europe that the company will buy again in the mobile and wireless space to fill gaps in its portfolio.
The company has a bid for wireless test vendor Catapult due to complete in a few weeks, a deal that sees Ixia move from its core market as an IP test vendor into the edge of mobile networks.
Although the ticket price of the deal was over $100 million, that included $40 million that Catapult itself holds in cash – making the net cost of the deal in cash to Ixia around $60 million. That means that Ixia still has plenty of cash, around $140 million to invest as it sees fit, Bhatnagar said.
So where might Ixia be looking to spend? Well, at the moment its focus is very much on pre-deployment performance testing. It aims to bring that approach to wireless networks, but also to expand its scope into in-network assurance and monitoring, without operators having to incur the cost of major passive probe-based systems.
The reason for this strategy is the fact the operators are set to move to IP networks in an end to end manner, even if some investments in LTE may take a while to materialise. When they do so, they will not be able to manage and monitor services and applications in the existing manner, Ixia argues,
Bhatnagar said that choice of acquisition would be taken once Ixia had "learnt more" about the wireless market, and that "customers will drive this company now".
"We will start working out what the gaps are in our business, and then next move will be to fill that. This is what you will see from us," he added.
Mobile Europe's best guess is that the next step for Ixia would be to move further into the assurance space, particularly as operators compete to differentiate around class of service and service quality. It bought Catapult because it thought it had the best LTE strategy and development path, and history of investment, of the available wireless test vendors on the market. So any likely target in the future would more than likely need to mirror that focus on IP and 4G networks.
In the meantime, Bhatnagar said that the company has been in discussion with European service providers about introducing its IP platform into the European market. The Catapult acquisition helps greatly with that, in terms of customer relationships, he added.