DZS adds ASSIA assets to its software stack

• Broadband technology specialist DZS continues its transformation
• It is acquiring network and service monitoring and management tools from ASSIA
• The move fits with its aim to enable agile, software-driven operations for network operators
• The deal comes with more than 50 existing telco customers and more than 100 experienced staff
• Related financials not disclosed, but DZS could do with a boost as it posts a limp Q1 

DZS, the broadband access and mobile transport vendor formerly known as Dasan Zhone Solutions, has continued its transformation towards becoming an enabler of agile, software-driven operations for network operators with the acquisition of “specific core assets” from Adaptive Spectrum and Signal Alignment, Inc. (better known in the broadband world as ASSIA) for an undisclosed cash sum.

DZS is acquiring ASSIA’s CloudCheck WiFi experience management and Expresse access-network optimization solutions that have been deployed by more than 50 network operators in North America, Europe and Asia, including multiple Tier 1 operators such as AT&T, BT, Deutsche Telekom, Lumen, Telefónica, Telus and Verizon.

In addition, about 110 ASSIA staff will join DZS, including software engineers and architects, sales staff and others, mostly located in Silicon Valley and Madrid, along with some staff located in a third-party R&D centre in Istanbul. The acquisition is expected to be completed within the next few weeks.

DZS says the acquired software solutions will “add data analytics and network intelligence capabilities to DZS Cloud, including managed WiFi solutions, access-network optimization and intelligent automation tools.” 

“With over 125 million broadband and WiFi connections under contract, CloudCheck and Expresse will elevate the DZS Cloud platform and expand our customer base to include marquee brands such as Bouygues Telecom, Deutsche Telekom, Liberty Latin America, Lumen, TalkTalk Group, Telefonica, TELUS and approximately 60 other notable service providers around the world,” noted Charlie Vogt, president and CEO of DZS. 

ASSIA was founded almost 20 years ago by Dr John Cioffi, a pioneer in DSL technology and, with good reason, one of the most respected leaders in the global broadband sector, so DZS is acquiring solid technology that has been developed by a respected company led by a renowned individual. But Cioffi will be one of the few staff not joining DZS, as he will remain with ASSIA with a few other employees.

“The DZS global deployed base of over 20 million ONTs, access points, gateways and subscriber devices will readily incorporate Expresse and CloudCheck,” noted Cioffi. “I am proud of ASSIA’s exceptionally talented employees for the many technological advancements and milestones achieved over the years and look to assist those who will follow their next chapter of success at DZS.”

ASSIA isn’t the first acquisition DZS has made as part of its business transformation: In 2021 it bought RIFT, a well-regarded company in the open source virtualized networking sector that specializes in the automated onboarding, orchestration and management of virtual network functions, and mobile data transport equipment vendor Optelian. (See DZS reinvents itself with RIFT acquisition.)

News of the ASSIA acquisition comes as DZS reports its first quarter financials, which, given the 16% increase in full year sales in 2021 to $350 million, are lacklustre. 

Despite being active in a growing sector that is awash with private and public investments, DZS reported revenues of $77 million, down from $81 million a year ago, and a slight loss of $1 million on an adjusted EBITDA basis: It cited “supply chain disruptions due to unforeseen manufacturing and shipping port shutdowns throughout China” for the less than stellar numbers.

The company says its order book is strong, that it is “well-positioned to take advantage of a decade-long infrastructure upgrade cycle to multigigabit services currently evolving in our industry,” and that the acquisition of the ASSIA assets will boost its margins and earnings. And the vendor is still bullish about its prospects for the year, stating that, with a backlog of orders valued at $243 million at the end of March, it is maintaining its full year revenue guidance of $380-410 million for the full year 2022. 

DZS’s share price is up by 2.1% to $12.21 in early trading on Tuesday morning.

- Ray Le Maistre, Editorial Director, TelecomTV