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CrossKeys Acquires Dynamic Broadband Networks to Deliver Reliable Internet Access

Strategic Insights

— 2 min read

CrossKeys Systems Corporation has announced the signing of a definitive agreement to acquire Dynamic Broadband Networks, a developer of broadband access management technology and software. This acquisition is expected to close in early January 2000 and will bring CrossKeys expertise in service level and performance management to the "last mile" of telecommunications connections.

Through this acquisition, CrossKeys will deliver products in this fiscal year to address the rapidly growing broadband access market. Service providers require broadband access management to deliver on their promise of high-speed Internet access. The deal extends CrossKeys' expertise across access networks and all the way to the end-customer, addressing the key "last mile" issue facing service providers.

Key Takeaways:

  • CrossKeys Systems Corporation, a recognized industry leader in service level and performance management, has acquired Dynamic Broadband Networks, a developer of broadband access management technology and software.
  • The acquisition is expected to close in early January 2000 and will enable CrossKeys to deliver products that manage the traffic and performance of networks from the backbone out to individual users.
  • The deal addresses the key "last mile" issue facing service providers, enabling them to deliver reliable high-speed Internet access to home users, home offices, and small businesses while maintaining service profitability.
  • CrossKeys will now offer solutions that provide controlled, competitive access to broadband distribution networks, enabling access and service providers to monitor bandwidth utilization, dynamically manage bandwidth consumption, and provide ideal broadband access management for cable, wireline (xDSL), satellite, and wireless broadband access services.
  • The acquisition expands CrossKeys' market opportunities and portfolio offerings, enabling service providers to deploy CrossKeys products to ensure fast, reliable Internet access for their subscribers.
  • Consideration for the acquisition includes a cash payment of US$10 million and warrants to purchase up to 2 million common shares with an exercise price in the range of US$6.75 to US$9.00.

Statistics:

  • In the United States, there are approximately 200 million Internet users, projected to grow to 500 million by 2003.
  • Total commercial activity on the Internet is projected to grow from US$100 billion in 1999 to US$1.3 trillion worldwide in 2003.
  • About two million households in the United States subscribe to high-speed data services today, projected to grow to 13 million within three years.
  • The demand for high-speed data service is expected to reach 13 million users in 2002 in the United States alone.
  • The US market for broadband access management is projected to grow from US$100 million in 1998 to over US$1.1 billion in 2002.
  • Broadband service providers face a complex dilemma, as they must oversubscribe the Internet connection to be profitable while providing reliable consistent service performance to attract and keep subscribers.

Sources:

  • Business Wire, "CrossKeys Systems Corporation Acquires Dynamic Broadband Networks" (December 21, 1999)
  • CrossKeys Systems Corporation, Press Release (December 21, 1999)
  • IDC, "The Future of the Internet" (October 1999)

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