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Ericsson Nabs NodePrime to Accelerate Data Center Plans

In a bid to expand its data management offerings, wireless equipment company Ericsson ERIC announced its intention to acquire full interest in NodePrime, a low-key infrastructure management startup.

Although most of the financial details of the deal were kept under wraps, Ericsson divulged that it will pay for the investment in cash. NodePrime will be integrated into the company’s Business Unit Cloud and IP division.

San Francisco-based NodePrime’s platform is said to be the only infrastructure management platform available at present, which can support the command and control of the entire ecosystem of components in data centers.

The software platform facilitates detection, analysis and automated configuration of data center hardware platforms, enabling them to become hyperscale and implement distributed infrastructure. NodePrime’s platform aids service providers to make decisions founded on informative data analysis about how to acquire, scale and build their tailored infrastructure.

NodePrime’s expertise will enable Ericsson to customize the platform as per specific requirements. The deal also eliminates the inherent risk of sourcing from an external vendor.

The deal might be new, but the relationship between Ericsson and NodePrime goes way back. Ericsson was one of several investors that participated in a $7 million seed funding round for the company last year. Ericsson is already leveraging NodePrime's platform, which provides support for its Hyperscale Datacenter System 8000 product — its platform for automatically discovering, configuring and managing data center hardware.

Ericsson has been expanding its software capabilities in the telecom space, especially in software defined networking, cloud platforms and network functions virtualization.

Late last year, Ericsson formed a partnership with Cisco, under which the companies were to unite platforms to target telecom operators and reportedly generate a minimum of $1 billion in incremental revenue prospects for each, starting 2018.

The deal will expand and strengthen Ericsson’s dominant position in the market for next-generation software defined datacenters.

Ericsson presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Motorola Solutions, Inc. MSI, Sonus Networks, Inc. SONS and ARC Group Worldwide, Inc. ARCW. While Motorola sports a Zacks Rank #1 (Strong Buy), Sonus and ARC Group both carry a Zacks Rank #2 (Buy).

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ERICSSON LM ADR (ERIC): Free Stock Analysis Report
SONUS NETWORKS (SONS): Free Stock Analysis Report
ARC GROUP WORLD (ARCW): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
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