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Kontron heeds carrier demand for software, buys Inocybe

Kontron has bought open source networking company Inocybe. The specialty hardware maker is adding SDN software to its portfolio as telco customers buy more commodity systems.

Kontron has acquired Inocybe Technologies, adding open source networking software to the German hardware maker's portfolio of computing systems for the telco industry.

Kontron, which announced the acquisition this week, purchased Inocybe's Open Networking Platform as telcos increasingly favor buying software separate from hardware. Kontron is a midsize supplier of white box systems to communications service providers (CSPs) and cable companies.

CSPs are replacing specialized hardware with more flexible software-centric networking, forcing companies like Kontron and Radisys, which recently sold itself to Reliance Industries, to reinvent themselves, said Lee Doyle, principal analyst at Doyle Research, based in Wellesley, Mass.

"This is part of Kontron's efforts to move in a more software direction -- Radisys has done this as well -- and to a more service-oriented model, in this case, based on open source," Doyle said.

Inocybe, on the other hand, is a small startup that could take advantage of the resources of a midsize telecom supplier, mainly since the market for open source software is still in its infancy within the telecom industry, Doyle said.

While Kontron did not release financial details, the price for Inocybe ranged from $5 million to $10 million, said John Zannos, previously the chief revenue officer of Inocybe and now a general manager of its technology within Kontron. The manufacturer plans to offer Inocybe's Open Networking Platform as a stand-alone product while also providing hardware specially designed to run the platform.

Inocybe's business

Inocybe's business model is similar to that of Red Hat, which sells its version of open source Linux and generates revenue from support and services on the server operating system. Under Kontron, Inocybe plans to continue developing commercial versions of all the networking software built under the Linux Foundation.

Open source is free, but making it work isn't.
Lee Doyleprincipal analyst, Doyle Research

The Open Networking Platform includes parts of the Open Network Automation Platform (ONAP), the OpenDaylight software-defined networking controller and the OpenSwitch network operating system. Service providers use Inocybe's platform as a tool for traffic engineering, network automation and network functions virtualization.

Tools like Inocybe's deliver open source software in a form that's ready for testing and then deploying in a production environment. The more difficult alternative is downloading the code from a Linux Foundation site and then stitching it together into something useful.

"Open source is free, but making it work isn't," Doyle said.

Before the acquisition, Inocybe had a seat on the board of the open source networking initiative within the Linux Foundation and was active in the development of several technologies, including OpenDaylight and OpenSwitch. All that work would continue under Kontron, Zannos said.

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