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Ericsson Buys Apcera Stake; Boosts Cloud with PaaS

Ericsson (ERIC) recently acquired a major stake in Apcera to strengthen its position in the cloud market with the addition of the platform as-a-service (PaaS) technology. Through this all-cash acquisition deal, Ericsson will extend its network approach into operator and enterprise cloud. Further, Ericsson will be able to provide governance and automation of operator and enterprise IT operations. Notably, the deal is expected to close in the fourth quarter of 2014.

Apcera is a U.S.-based enterprise services company which develops the next-generation PaaS called Continuum (TM). This works across cloud, on premise and hybrid environments. Following the acquisition, Apcera will operate as a standalone company while Ericsson will fund the former’s technology upgrades as well as help it expand its enterprise sales channel.

Lately, Ericsson has been restructuring its portfolio to become a leader in policy-based automation and governance of telecom networks. The Apcera stake buy takes the company closer to its future objectives of becoming an undisputed leader in the operator and enterprise cloud arena. Notably, cloud is one of the strategic areas Ericsson has been targeting for growth.

Cloud technology is impacting the global ICT infrastructure market, as a result of which service providers continuously need to upgrade their systems to provide more value to customers. Likewise, Ericsson’s addition of Apcera`s PaaS technology will help it deliver complete cloud automation to run all workload while providing complete infrastructure control.

Ericsson currently has a Zacks Rank #3 (Hold). Some better-ranked companies in the wireless industry include Aruba Networks (ARUN), SeaChange International Inc. (SEAC) and Arista Networks Inc. (ANET). While SeaChange sports a Zacks Rank #1 (Strong Buy), Aruba and Arista carry a Zacks Rank #2 (Buy).

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