Just a day after Oracle (NASDAQ: ORCL) and Sun Microsystems (NASDAQ: JAVA) agreed on merger terms, Broadcom again shook up the data storage market with its hostile takeover bid for HBA, CNA and embedded storage products vendor Emulex.

“Broadcom believes that its leadership in Ethernet networking, together with Emulex’s deep expertise in Fibre Channel storage networking, will enable the combined company to accelerate the development of converged solutions for enterprise networks,” Broadcom said in a statement.

Broadcom offered $764 million in cash for Emulex, or $9.25 a share, a 40 percent premium to its close Monday night. Emulex shares traded as high as $9.68 this morning, suggesting that traders think Broadcom’s offer was not its final one.

Broadcom CEO Scott McGregor said in a statement that “A combination of Broadcom and Emulex addresses our customers’ growing need to apply the economics of Ethernet to the Fibre Channel storage space to achieve low-cost network converged solutions. The logical evolution of the enterprise network is for a transition to a converged fabric architecture that incorporates a broad array of technologies. Our combined entity can be a one-stop shop for key networking and storage technologies for the enterprise and for our industry.”

In an open letter to Emulex’s board, McGregor said Broadcom sought to engage Emulex in merger discussions in December. “We were disappointed when, in early January, you responded that the company was not for sale and abruptly cut off the possibility of further discussions,” he wrote. “Even more troubling was the fact that merely one week after that communication, you took actions clearly designed to thwart the ability of your shareholders to receive a premium for their shares. These included adopting a ‘poison pill’ and amending your bylaws.”

McGregor said Broadcom was launching a legal action in the Delaware Court of Chancery against Emulex “to declare invalid that portion of Section 6.4 of Emulex’s recently amended bylaws that imposes the requirement that the bylaws may not be altered, amended or repealed by the stockholders without the vote or written consent of 66-2/3 percent of the outstanding shares. We will also ask the Court of Chancery to enjoin enforcement of that provision as well as any improper actions to impede this proposal or Broadcom’s efforts to acquire control of Emulex.

“Of course, our strong preference would be to proceed in a friendly, constructive way to make this exceptional opportunity a reality as soon as possible,” McGregor added.

The convergence of Fibre Channel and Ethernet, McGregor wrote, “will be offered through a single chip solution inside servers and switches. Customers will demand from their suppliers advanced chip technology and supply chain scale and reliability, which is not an area of strength for Emulex. Broadcom brings tremendous value in advanced chip technology and supply chain scale and reliability to Emulex’s products — and customers.”

In a research note today, Stifel Nicolaus analyst Aaron Rakers wrote that Emulex as a standalone company “would face some strategic and fundamental challenges going forward with regard to its positioning in blade servers,” and he said that QLogic (NASDAQ: QLGC) is better positioned for FCoE.

Wedbush Morgan analyst Kaushik Roy speculated that Ethernet vendors are “getting desperate for the Fibre Channel stack,” with FCoE and Converged Enhanced Ethernet (CEE) looming. He said that other companies like Intel (NASDAQ: INTC), Marvell (NASDAQ: MRVL) or PMC-Sierra (NASDAQ: PMCS) might want to make a bid for Emulex, and he said Juniper Networks (NASDAQ: JNPR) might want to acquire QLogic.

Emulex issued a statement today confirming that it had received an unsolicited proposal from Broadcom to acquire the company for $9.25 a share in cash. “The Board will review the proposal in due course, consistent with its fiduciary duties, in consultation with its financial advisor, Goldman, Sachs & Co., and its legal advisor, Gibson, Dunn & Crutcher LLP. Emulex noted that there is no need for Emulex stockholders to take any action at this time.”

In an interview with founder and CEO Robert Stevens it was brought to light how many businesses are suffering from poor budgeting and lack Telecom Expense Management.

This is why the Aberdeen Group states that…

“…a typical company’s lack of highly refined expertise, tools, and methodologies is largely the reason why in-house return on investment for telecom expense management fails to match those of Total Telecom Cost Management™

Robert, may we start with what differentiates Total Telecom Consulting from other telecom agencies in the region?

“We operate from an Unbiased pool of resources and we carry no quotas for sales of services, this truly allows us to bring a Totally Unbiased approach to the table for clients and prospects.”

Robert, Are many prospects hesitant to the notion of exploring their options with the current economic climate?

“YES! However many prospects are accustomed to the sales reps that come in and make the sale, all to never offer them long standing support. Most sales reps are just sales reps. there are quotas to be met and they don’t have time to service their customers and in many cases they sold them the cheapest solution available. I want to express that cheaper is not always better and this is usually reflected when you needs customer service and or support.”

“I understand that many companies are hesitant to do anything however this behavior is purely based upon fear. Often times there is confusion, many think that efforts have something to do with selling them new phone systems or something of the like”.

Are you recommending any cap-ex spending in the Telecom and I.T. sectors?

“With the current economic climate we aren’t recommending any Cap-Ex spending unless there are dollars that have been allocated for these types of projects. If this is the case we can often negotiate better pricing with the current economic climate so the end result is a reduced Cap-ex spend while getting the systems to put clients a notch above their competition. I am however recommending better use of existing services or better priced solutions to make operations more productive and efficient. Often times we can negotiate with Incumbent vendors to provide better pricing and products that truly fit the customers needs and improve budgeting. We know what the carriers are capable of offering and are armed with the knowledge that carriers do not want customers to have”.

Are there any types of services that you would recommend to the general business community to help reduce line item expenses?

“The business community is such a diverse set that no one business has the same needs. The best feature of Total Telecom’s Consulting services is that we partner with different telecommunications Voice&Data carriers that provide us with a complete and unbiased pool of resources to supply our clients with customized solutions”.

How do you see the current economic conditions impacting the business community in a positive way?

“There are alot of Competing business models in the community. The companies that have thought progressively and have taken proper steps to be efficient, financially stable, and productive will survive the times. However there will be a significant amount of their competition that will not. While this is sad we need to keep in mind that this is all part of business and the strong shall survive”.

What type of an impact has the economic climate had on your business?

“We are committed to helping businesses, and CFO’s, with today’s economic situations. Our business has actually gained more momentum as increasing numbers of clients and prospects realize this is the time to invest in feature rich productivity systems and high-value solutions in order to gear their businesses for the inevitable business growth in the near future. lets face it the competition is getting weeded out, if you are going to be prepared to capture more client base you had better be prepared because these types of efforts often happen quickly, and the efficient and productive players always come out on top”.

To learn more about Total Telecom Consulting you may view their website www.totaltelcomconsulting.com You may also contact them from their website.

At least one netbook has passed Verizon’s rigid network compatibility test and others are in the works, says a company source who declined to name the computer manufacturers involved.

Analysts see the move as an answer to rival AT&T’s (T Quote – Cramer on T – Stock Picks) recent netbook efforts. Earlier this month, AT&T announced it would sell netbooks for $99 through retailers like RadioShack (RSH Quote – Cramer on RSH – Stock Picks) in exchange for two-year service contracts.

To date, Verizon has offered $100 and $200 rebates on more expensive laptops with two-year contracts, but the subsidized netbook category is an altogether new strategy for the New Jersey wireless joint venture half owned by Vodafone (VOD Quote – Cramer on VOD – Stock Picks).

The subsidy war among wireless telcos really caught on last year after AT&T decided to discount Apple (AAPL Quote – Cramer on AAPL – Stock Picks) iPhones. The move helped Apple more than triple the rate of iPhone sales, and it gave AT&T some sweet hand candy to lure customers away from competitors like Verizon, Sprint (S Quote – Cramer on S – Stock Picks) and Deutsche Telekom’s (DT Quote – Cramer on DT – Stock Picks) T-Mobile.

“Verizon and AT&T have each other in their respective cross hairs,” says Nielsen wireless analyst Roger Entner, referring to the pitched battle to win the other company’s customers.

Netbooks from outfits like Asus and Acer are wildly popular in these tough economic times. They sell for about $300 without a telco subsidy. If Verizon covers $200 of the tab and gets a customer locked in to a two-year contract, the payback will be six-fold. Verizon data plans are about $60 per month. Over two years, that’s worth $1,440 to Verizon.

Other PC makers are expected to get on board the netbook bandwagon. Both Dell (DELL Quote – Cramer on DELL – Stock Picks) and Hewlett-Packard (HPQ Quote – Cramer on HPQ – Stock Picks) have been mentioned as potential netbook partners with Verizon and AT&T. There’s no reason the think Apple (AAPL Quote – Cramer on AAPL – Stock Picks) will forego the netbook telco opportunity given the success it had with AT&T and the iPhone.

Investors will be keen to note that Qualcomm(QCOM Quote – Cramer on QCOM – Stock Picks) has emerged as once of the leading suppliers of the internal 3G modems in laptops, effectively replacing the clunky plug in antenna configuration.

It’s doubtful that the 3G netbook will help telcos rope in millions of new customers they haven’t already rounded up with phone plans, but there are a some markets that could catch on, says Nielsen’s Entner.

“This will be a big hit for the back-to-school crowd,” says Entner. “You have to buy a computer, and here’s one for $100.”

My only question is how much are they going to limit certain functionalities of the netbooks?

The $1.68 per share offer represents a 20 percent premium on Certicom’s closing stock price on the Toronto Stock Exchange Thursday and a 40 percent increase over RIM’s $1.19 per share, or $52.4 million, hostile offer. The deal is valued at $73 million. Certicom’s board is recommending shareholders accept the offer at a meeting to be held in March.

VeriSign, based in California, is an infrastructure vendor for voice, video and data networks. Certicom rolled out the first wireless VPN for cellphones in 2002 and has worked with a variety of handset makers, including Motorola.

Certicom received an injunction from the Ontario Superior Court of Justice to stop RIM’s bid because RIM and its subsidiary had violated a nondisclosure agreements that Certicom and RIM had made in 2007 and 2008 by using confidential information from Certicom to make its bid.

Saying that its offer could “no longer be satisfied” because of a decision by the Ontario Superior Court of Justice, the BlackBerry maker withdrew its bid, handing a victory to Certicom, which had urged its shareholders in December to reject the bid.

At that time, Certicom had also made a filing with the court, seeking an injunction to stop the bid. Certicom said earlier this week that the court granted the injunction because RIM and its subsidiary had violated a nondisclosure agreements that Certicom and RIM had made in 2007 and 2008 by using confidential information from Certicom to make its bid.  

On Dec. 3, RIM made an offer to acquire Certicom, which specializes in wireless VPN security and encryption, for around $1.19 per share, or $52.4 million, after it said it tried to reach a deal with Certicom’s managers but could not. At the time of the bid, RIM said the offer represented a 75 percent premium on Certicom’s shares as they stood on Dec. 2. Certicom rolled out the first wireless VPN for cellphones in 2002 and has worked with a variety of handset makers, including Motorola.

Overture picks up a whole bunch of new products from Ceterus, including optical Ethernet access solutions for cell site backhaul – just the thing you want to have in the portfolio with ClearWire starting to more forward and Verizon Networks saying they’re going to roll out LTE in 2009. 

Add the new products to Overture’s business service solutions, and the company gets to present a portrait of a market leader in multiple, high-growth Carrier Ethernet segments and one-stop shopping for network service providers looking to purchase Ethernet hardware for retail services offerings (i.e. businesses) and backhaul solutions (i.e. every wireless carrier selling a 3G; double for those deploying 4G networks).

Overture currently has Carrier Ethernet products in 10 of the top 15 service providers in the U.S., and it has more than 180 service provider and enterprise customers worldwide.

For more:

Wednesday evening, the Mississauga-based cryptography company responded to RIM’s $66-million hostile takeover bid of $1.50 per share, indicating that “several other parties” had expressed interest in either purchasing or merging with Certicom.

“Management of Certicom has recently been engaged in discussions specifically with RIM and another party and has attempted to engage them in a fair process; however RIM desired that Certicom engage in exclusive discussions only,” Certicom said in a statement.

Certicom, which specializes in elliptic curve cryptography (ECC), a wireless security technology whose uses include the encryption of mobile data and communications. Smart-phone makers – such as RIM – and software companies use Certicom’s ECC technology as a platform for building their own secure systems.

Certicom’s board of directors said it planned to form a committee to evaluate the proposal from the BlackBerry maker, as well as other offers.

The committee will include current Certicom board members Jim Fleck, Jeffrey Chisholm and J. Ian Giffen, who also serves on the boards of Corel Corp., Ruggedcom Inc. and is the chairman of the board of Descartes Systems Inc.

RIM will acquire a key piece of security technology used by its smart phone competitors if its hostile bid for Ceritcom succeeds. Certicom’s ECC technology is used as a security platform by other companies such as Motorola Inc., Texas Instruments Inc. and International Business Machines Corp.

“There’s a revenue aspect to this, but it’s also about control,” said Carmi Levy, an analyst with AR Communications Inc. “RIM can establish a competitive beachhead by owning that technology and controlling how it is distributed worldwide.”

Although the deal is small, it would be only the third major acquisition in the past two years for a company that prides itself on in-house innovation and rarely opts for mergers and acquisitions. In March, 2006, RIM purchased California software maker Ascendent Systems Inc. and in July of that same year it picked up Slipstream Data Inc.

The Waterloo, Ont.-based company has long used its attention to security as a selling point. Its dedication to a secure messaging system has enabled the company’s BlackBerry devices to become a staple for government officials, CEOs and even agents in the U.S. Federal Bureau of Investigation.

Certicom’s technology is often used as part of Microsoft’s Exchange Server software, a so-called push e-mail system designed to rival RIM’s network that is employed by devices such as Apple Inc.’s iPhone.

RIM said the company has been in negotiations with Certicom’s board since February, 2007.

“As we are unable to engage Certicom management in a meaningful dialogue to advance the terms of a potential transaction, we believe it is in the best interests of our respective shareholders, employees and customers to make this attractive offer directly to Certicom shareholders now,” RIM co-chief executive officer Jim Balsillie said in a statement.

RIM executives declined to comment. Officials at Certicom’s head office did not return requests for comment on Wednesday.

The all-cash offer of $1.50 a share represents a premium of 76.5 per cent over the closing price of Certicom shares on Tuesday, RIM said in a statement. RIM has been licensing technology from Certicom for more than a decade.

RIM’s proposed takeover could have been motivated by a desire to charge competitors for royalties, a reluctance to continue paying licensing fees to Certicom or a plan to improve its competitive advantage against other smart-phone makers, said Canaccord Adams analyst Peter Misek.

“This is clever,” he said. “Any of those three scenarios seem pretty good to me.”

The announcement of the proposed deal overshadowed RIM’s revelation Tuesday evening that it now expects third-quarter adjusted earnings of between 81 cents and 83 cents a diluted share for the three months ended Nov. 29, down from an initial forecast of 89 to 97 cents.

Citing the economic slowdown, RIM said revenue for the quarter will be between $2.75-billion to $2.78-billion, compared with its earlier projection of $2.95-billion to $3.1-billion.

The weakening of the Canadian dollar against the U.S. greenback accounted for about one-third of the difference between forecast revenue numbers and the preliminary numbers the company unveiled Tuesday. Slow sales of BlackBerry devices account for the remainder of the revenue slide, which RIM attributes to “general economic weakness in the United States and shifts in product launch dates within the quarter.”

RIM’s stock has taken a beating since peaking at close to $150 in June. The slide picked up speed in late September when the company announced shrinking profit margins for the current quarter, which spooked investors just as the financial turmoil in the global capital markets was taking hold.

Analysts began slashing their outlooks on RIM and cutting long-term price targets as concern grew over the company’s plan to diversify its product line beyond its core base of business users in an effort to capture a greater share of the consumer cellphone market.

Since late September, RIM’s market capitalization has been cut in half, falling from more than $60-billion in late September to around $26-billion on Tuesday.

The Associated Press reports new claims for U.S. worker unemployment benefits dipped slightly week-over-week to 509,000 while ongoing claims hit the 4.09 million mark, the highest level since the recession of the early 1980s. The federal government’s latest monthly report on unemployment, scheduled for release Friday, is expected to post November job losses in excess of 300,000.

As part of a “dramatic consolidation” of its mobile platforms, the carrier expects to, over the next few years, standardize the OS on its smartphones, which will make up the majority of its portfolio by 2014, said Roger Smith, director of next generation services for AT&T.
Smith, speaking at the Symbian Partner Event in San Francisco, said he thinks Symbian is “a very credible and likely candidate” to become the carrier’s platform of choice. 

Smith reiterated that the change is related to completely AT&T-branded smartphones, and not third-party products like Apple’s iPhone 3G that use AT&T’s network.  Smith said he worried about how platform fragmentation going forward would affect AT&T’s ability to manage its portfolio. “Whose support nightmare is that?” he asked. “It’s ours.”