SupportSoft Buys Core Networks Inc.

There’s further consolidation in the operational support software space, as SupportSoft Inc. has struck a $17-million deal to buy Core Networks Inc.

The cash transaction bolsters SupportSoft’s product lineup: Core provides network monitoring, management and activation tools for digital subscriber line and cable-modem providers, including usage-policy management, firmware-upgrade management and remote management of home-network devices.

“Comprehensive service automation — especially for the 'last mile’ leading to a subscriber’s home or small business — is essential to creating a great customer experience,” said SupportSoft chairman and CEO Radha Basu in a statement. “We believe the integration of Core Networks’ real-time networking products with SupportSoft’s Real-Time Service Management platform uniquely positions our combined offering as the first true, end-to-end for IP-based digital services.”

The company said it now has the foundation to help operators launch voice-over-Internet protocol, video-over-IP and other enhanced broadband offerings. SupportSoft also will be able to expand its support for home-network and small-business environments through the remote management of residential and small-business gateway equipment.

SupportSoft said the deal will speed its ability to deliver end-to-end automation solutions for broadband providers.

“Having met with broadband providers around the globe, SupportSoft is consistently named as the company that is helping redefine customer service delivery through software innovation,” said Craig Soderquist, Core Networks president and CEO, in a statement. “Rather than working with multiple point solution vendors with conflicting agendas, technologies and priorities — not to mention an inconsistent understanding of network technologies — service providers now have one leader they can turn to for their service delivery needs.”

On the earnings side, SupportSoft said second-quarter revenue reached $16.9 million, a 34% increased over last year’s $12.6 million. Net income reached $4.9 million on a GAAP basis, versus $2 million in the year earlier period.

The company said it was its 10 consecutive quarter of positive cash flow. SupportSoft counts Adelphia Communications Corp., BellSouth Corp., Charter Communications Inc., Comcast Corp., Cox Communications Inc. and Time Warner Cable among its customers.

Tellabs also reported earnings growth, with second quarter revenue of $304 million, compared to $234 million last year, and earnings of $50 million.

The company’s transport division led the way, reporting $161 million in revenue, a 74% increase over last year’s $93 million.

That increase helped to make up for a 10% drop in managed access revenue, quarter over quarter, from $85 million to $75 million, attributed to a drop in circuit-switched sales.