Nokia’s Acquisition of Deepfield a Big Win for Ann Arbor’s IT Industry

Finnish telecom giant Nokia today announced it has acquired Ann Arbor, MI-based Deepfield, an IP network performance management and security startup. The terms of the deal were not disclosed.

Deepfield was co-founded in 2011 by Craig Labovitz, formerly the chief scientist at Arbor Networks, a Burlington, MA-based company that grew from being a DARPA-funded research project at the University of Michigan to the traffic management and security tool used by most of the leading content providers and Internet service providers in North America. (Arbor Networks went on to be acquired by Tektronix in 2010 and is now owned by NetScout.) Before that, Labovitz worked for companies like Microsoft and the nonprofit Merit Network.

“It’s a great outcome for the Deepfield team, for Nokia, and for Ann Arbor,” Labovitz says of the acquisition. “I’m excited for how we might grow.”

Labovitz says Deepfield’s Michigan office will remain intact, and the company plans to hire 40 to 60 new employees over the next 18 months. He will continue to lead Deepfield’s team.

When we interviewed Labovitz in 2012, he explained how ever-improving cloud technologies were changing the landscape of the Internet. “The way that large Internet providers build infrastructure and monetize it is all changing,” Labovitz said at the time. “There’s a massive disruption in how money flows. It used to be simple, but now it’s complicated. Everyone is building a service, and there are lots of different components and players.”

To help solve that problem, Deepfield created “cloud genome” technology. The company—which includes staffers who worked on the original “pre-Internet” NSAnet—searches, monitors, analyzes, and visualizes machine-generated data from applications, servers, networks and sensors. Having this data, Labovitz told us in 2012, enables providers to launch new services quicker, optimize cost, and improve the performance and availability of their cloud infrastructure. “I don’t think it’s ever been done before—the mapping of the public and private cloud,” he added. “We’re not just looking at web pages, but how all the pieces fit together.”

According to Adrian Fortino of Mercury Fund, an early investor in the startup, Deepfield’s platform provides unmatched visibility, which appealed to Nokia. “The network genome is where they’ve really built their uniqueness and leadership in the market,” he adds.

Labovitz says Deepfield had collaborated with Nokia on several projects for their “large, overlapping set of customers” and mutually came to the conclusion that a “tighter integration” made sense.

In a press release, Nokia said that Deepfield will “extend our leadership in real-time, analytics-driven network and service automation, providing customers—including communications service providers; cable operators; and cloud, webscale, and large technology companies—with greater network and application insight, control, and DDoS [distributed denial-of-service] protection.”

Fortino considers Nokia’s acquisition of Deepfield a signal that Ann Arbor is becoming known throughout the industry for its innovative IT startups, particularly in the cybersecurity realm.

“I’m excited for the Deepfield team,” he says. “It’s a great partnership. I’m also super excited for what it does for the region—it’s an opportunity to be recognized as a real player. It’s the most substantial exit in Ann Arbor in some time.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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