Canadian software company Vecima Networks aims to “challenge Harmonic” for control of cable’s virtualized network tech future with its $20 million "stalking horse" bid for bankrupt Casa Systems’ cable technology business, wrote Dell’Oro Group analyst Jeff Heynen.
“Though Harmonic currently dominates the vCMTS market, holding 98% of global revenue in 2023, a good portion of that revenue comes from Comcast, which was the early mover in deploying vCMTS platforms in the industry,” Heynen said in a Wednesday-afternoon blog posting rendered shortly after Casa Systems announced its bankruptcy.
“Charter is also planning to deploy Harmonic’s cOS broadband platform but has also signaled its desire to have multiple vendors’ vCMTS platforms in its network, which leaves the door open for Vecima to secure a portion of that business in addition to the RPD business it has already solidified there,” Heynen added.
The cable network tech market is ripe with opportunity, with operators looking to deploy multi-gigabit-speed upgrades to their broadband networks, built around the new DOCSIS 4.0 standard and next-generation schemes that virtualize core appliances including the cable-modem termination system (CMTS) into software running on garden-variety computer servers, part of a broader alignment commonly referred to as Distributed Access Architecture" (DAA).
While Harmonic has emerged as an early leader of this new market, incumbent tech vendors of the old physical CMTS world, a list that also includes CommScope, have struggled to find traction.
Last year, as Heynen noted, Casa Systems generated just $41 million from the business Toronto-based Vecima seeks to acquire, most of that money coming from licensing its traditional C100G Converged Cable Access Platform (CCAP) product. That was down from $81 million in 2022 and $115 million in 2021.
However, through its Axyom-branded vCMTS software, Casa does have "DAA traction" with cable-operator clients including Rogers Communications, Vodafone, Liberty Global and Claro Colombia.
"From a product perspective, Vecima gains Casa’s Axyom vCMTS software, which it can use alongside its own Entra vCMTS platform to scale overall vCMTS deployments as they continue to expand at cable operators around the world," Heynen wrote.
“What Vecima offers to the Casa cable unit is a renewed focus on the cable and fixed broadband markets, which was arguably missing at Casa as the company tried to balance R&D investments in its cable, vBNG, mobile core, and fixed wireless access product lines,” the analyst added. “With the focus and continued support by Vecima of Casa’s existing customer base, Vecima can potentially turn those customers into longer-term DAA customers.”
