Huawei Buys Fastwire – Who? Why?

In a first step to expand their OSS product and services capabilities, network equipment giant Huawei has acquired the little known OSS  developer Fastwire.

Ray at Light Reading reports that Huawei has acquired Fastwire Pte. (a Sydney company that had been owned by Macquarie Bank) and the company’s executive team.

I have to admit to not being familiar with Fastwire. A look in to their history shows that the current incarnation of Fastwire came from the merger of S2Net (the product developers) and Fastwire (at the time, system integrators) in 2007.

No price was given. Traditional OSS companies are being acquired for not much more than a 1-2 times multiplier on annual revenues. Unless there’s a bidding war, and unless it’s something particularly trendy like SDN or Big Data. Considering the market right now, my guesstimate is that the low $tens-of-millions is possible, assuming their quite impressive customer list is happily renewing annual support/upgrade contracts.

On paper, Huawei has just acquired a pretty full inventory-centric fulfilment stack. Fastwire’s S2Net product suite comprises inventory, automation, service activation and network data reconciliation. If the tech is good, this could be a bit of a bargain for Huawei who I had down as potential candidates for splashing a lot more cash on buying one of the far bigger OSS vendors.

But Huawei seems unwilling to bite off more than it can chew. As Ray notes in his article, Huawei has some OSS capability (mainly network management) and is looking to drive more OSS project/product revenues. Adding some core functionality like inventory and fulfilment is a relatively simple next step and, from a small company like Fastwire, it comes comes with a lot less baggage that a big acquisition: Fastwire’s team and assets can be spun in to a neat little business unit within Huawei; Add a bit of product investment to integrate things; And with a ready-made, scalable delivery capability within Huawei already; Could be a winner.

And so, the acquisition of OSS by hardware vendors continues (Ericsson to buy TelcordiaCisco Buys Bits of ComptelRiverbed to buy OpnetCisco to Buy CaridenWhy did Juniper buy WANDL?).

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