Deal Vaults Arris Into VOD Game - Multichannel

Deal Vaults Arris Into VOD Game

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Arris Group Inc. is taking one small acquisition step in hopes of making a giant leap into video-on-demand transport and metro fiber technology.

The cable-technology vendor has snapped up Fremont, Calif.-based Atoga Systems for a bargain-basement $500,000 in cash, plus assumption of lease options. That relatively small investment will buy Arris crucial technology that extends its reach into the metro area data transport and video-on-demand backbone arenas.

Atoga's assets include an optical application router product line and the companion AppDirector hardware management system, which delivers Internet-protocol Ethernet and time-division multiplexing (TDM) traffic over metro fiber.

Arris has been reselling Atoga's products since September. By acquiring the product line outright, it hopes to directly marry transport technology to its own C4 cable-modem termination system products. In the process, Arris intends to offer cable operators a simpler way to flow data, voice and video across these metro networks.

"What we were trying to do there is really get a piece of the converged metro marketplace," said Arris president of new business ventures Bryant Isaacs. "Right now, most of our customers have multiple networks, and obviously we see the convergence of voice and data over IP.

"We also see video at some point following, so what Atoga helps us to do is provide more of a converged metro back end, with products we have already in our family — things like C4, et cetera."

Gaining the Ethernet and TDM technology often used in metro synchronous optical networks (SONET) and dense wave-division multiplexing (DWDM) systems will be useful not only for residential but also business offerings, he added.

More importantly, the acquisition gives Arris a stronger foothold in the VOD-transport market, and that's now a key company initiative, Isaacs said. Arris recently used the Atoga gear in an interoperability trial with VOD server vendors SeaChange International Inc. and Concurrent Computer Corp.

"We are focusing specifically on VOD transport with the Atoga product, so connecting servers to the access network where the Atoga product plays," Isaacs said. "We also, over time, expect to see convergence of video with voice and data over IP."

The acquisition comes despite a series of cutbacks and layoffs at Arris. But Isaacs defended the move, saying it was an effort to strengthen the company's likely growth areas, even as it pares down less-promising areas.

"We are preparing our company for growth, so cutbacks in areas that are not viewed as growth areas makes total sense," he said. "But with a stronger balance sheet and a company that is looking for growth, we have to do things that allow us to grow, and so that is what this is supposed to do."

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