Buying SD’s Ortiva Wireless Adds Video Optimization to Allot’s Tools

5/2/12Follow @bvbigelow

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May 1, Allot says integrating Ortiva’s technology with Allot’s service gateway will add video optimization to traffic steering, media caching, and other tools that Allot already uses to enable mobile operators to optimize data traffic and manage their network operations. “Our own MobileTrends Report says video now accounts for over 40 percent of global mobile Internet traffic. And it’s all ‘over-the-top,’” Allot says, meaning that operators use Allot’s advanced computer network packet filtering technology (known as Deep Packet Inspection, or DPI) to manage such traffic.

As Zionts explained last August, Ortiva improves the quality of a video streaming for a mobile user by reducing the amount of data that gets transmitted. The company has raised nearly $40 million over the past eight years from San Diego’s Mission Ventures and Avalon Ventures, along with Palo Alto, CA-based Artiman Ventures, Intel Capital, and Comcast Interactive Capital.

As a private company, Ortiva does not disclose details of its financial operations. Allot reported its financial results yesterday, posting a profit of $3.2 million, or 10 cents a share, on revenue of $24.2 million for the first quarter of 2012. Allot says its first-quarter revenue increased by 41 percent over the $17.2 million during the same period last year. Allot says the acquisition is expected to add between $3 million to $5 million in revenues in the second half of 2012, with a gross margin profile similar to Allot’s current level.

In Allot’s statement, CEO Hadar says, “Since the introduction of Allot Service Gateway in 2007, our goal has been to leverage our unique technology to enable the broadest range of cost-saving and revenue-generating services on a single intelligent network services platform. By purchasing Ortiva, we will own an innovative video optimization solution, one of the major value-adds that our customers are seeking today. As video becomes an ever-increasing challenge for mobile networks, this acquisition will allow Allot to offer a robust and tightly integrated video optimization service within Allot Service Gateway. We look forward to welcoming Ortiva’s talented team into our company.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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