With Ixia39s software Keysight has positioned itself to sell products for testing everything from the physical to the application layer of a communications system Image courtesy of Esther Simpson Creative Commons

As Wireless Complexity Looms, Keysight Spends $1.6 Billion on Test Software Maker

Jan. 30, 2017
With Ixia's test software, Keysight has positioned itself to sell products for evaluating everything from the physical to the application layer.

For years, electrical engineers viewed the oscilloscope as the center of the lab bench, cluttered with boxes of test equipment and probes. But in recent years Keysight Technologies, the former electronic test division of Agilent, has been trying to turn the center of the lab bench into something less tangible.

The company is betting that specialized software will take increasingly big bites out of the testing and validation that standard machines once did. On Monday, Keysight doubled down with the $1.6 billion acquisition of Ixia, a network test company whose software is vital for testing connected devices and the wireless networks ferrying data to the cloud.

Founded as an Ethernet testing company in 1997, Ixia sells software for design and verification to network equipment manufacturers like Cisco and service providers like Verizon. That software dovetails with Keysight’s basic test equipment, which analyzes the physical layer – the electrical, wireless, and optical behavior – of devices.

Ron Nersesian, Keysight’s chief executive, said that the acquisition would help the company tackle the complexity of 5G wireless networks, which will connect hundred millions of devices installed in cars and factories. He added that the software tools would give them a suite of products for testing mobile devices, up to data centers, up to the cloud.

To prepare for the complexity of 5G communications, test equipment makers are using software to program new modular machines for an array of tasks. Many companies are also using software to collect data and provide more sophisticated feedback on test results. That information can be used to speed prototyping, reduce costs, and optimize designs.

Last year, for instance, researchers at New York University devised channel simulation software to better grasp the nature and power behind millimeter waves, whose high frequencies engineers are using in 5G networks. The researchers also worked with National Instruments to build software that helped engineers design millimeter wave antennas that can be steered electronically.

In recent years, Keysight has been preparing for when test equipment becomes a vessel for software. Two years ago, it spent $600 million to acquire Anite, a British company that sold research and development software for wireless devices. The Santa Rosa, Calif., company is now adding over 700 software engineers employed by Ixia.

Keysight believes that Ixia’s software is critical for simulating and testing wireless networks, which are growing more complex and heterogeneous, with large cellular stations and small cells woven into a patchwork of coverage. Ixia also sells software for gaining visibility into networks and finding security holes.

The deal is scheduled to close by the end of October this year. Keysight said that it had struck agreements with Errol Ginsberg, Ixia’s chairman, and Katelia Capital Group, which together own around 23% of Ixia’s stock. Both will vote for the deal, which Keysight is paying for in cash.

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