Network News: Zayo Buys AboveNet, Big Switch, Cisco

Here’s our review of some of today’s noteworthy links for the networking sector of the data center industry

Zayo to acquire AboveNet.  In a blockbuster deal for the telecom sector, Zayo Group LLC will acquire AboveNet for approximately $2.2 billion. The $84 per share in cash offering represents a 13 percent premium over AboveNet's closing price on March 16th and a 21 percent premium over the average closing stock price for the past 60 days.  Chicago-based private equity firm GTCR will make an equity investment in Zayo as a part of the transaction. The agreement between parties gives AboveNet a 30 day "go shop" provision, during which it can solicit and enter into discussions with other parties. The transaction with Zayo Group is expected to close in mid 2012. Zayo Group acquired 360 Networks last year and its zColo subsidiary opened a new facility in Chicago in January. "The fit is excellent," notes Rob Powell on Telecom Ramblings. "Zayo’s business is mostly of the wholesale variety. AboveNet has focused on enterprises for some years now, but only the largest ones and mainly out of data centers. AboveNet has focused more and more on WAN services, while Zayo more on infrastructure. There’s enough overlap to make it easy to integrate, yet enough differences to offer plenty of opportunities for revenue synergies."

Big Switch announces Open SDN.  Big Switch Networks announced its Open Software-Defined Networking (Open SDN) architecture. The original goal of SDN and the OpenFlow movement was to make networks as programmable as computers by creating an x86-like networking set of instructions to build upon. The Open Networking Foundation (ONF) was to standardize components. The three pillars of the Open SDN architecture are open standards such as OpenFlow, Open APIs to program the network, and an open source integration layer.   These three pillars ensure companies get all the benefits of SDN: more vendor independence, more innovation, reduced time to operations and better investment protection. “OpenFlow and SDN have been gaining significant momentum and, as customers adopt these technologies, it is critical they look for open standards, open APIs and open source to ensure the SDN solution they implement is future-proof,” said Guido Appenzeller, Co-Founder and CEO of Big Switch Networks. “Big Switch Networks has been at the forefront of the OpenFlow standard creation, offered enterprise-grade open source SDN solutions to the community and continuously expanded its ecosystem of partners. Openness will be core to SDN success and, by relentlessly delivering it in our Open SDN™ architecture, we plan to stay ahead of the market.”

Cisco's NDS receives $18 million in damages from Echostar. Cisco (CSCO) recently purchased video content and security company NDS for approximately $5 billion. NDS announced that it has received full payment of $18.9 million in damages from EchoStar (SATS) and Kudelsi in recognition that NDS were found sole prevailing party and vindicated of all allegations of piracy. Dr. Abe Peled, Executive Chairman, NDS Group commented: “This brings an end to this long drawn- out process in which we vehemently denied all allegations of piracy which were made against us over a decade ago." Cisco also announced that it has completed the acquisition of privately held Lightwire.