Acme Packet

Prospectus Summary

PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information appearing in this prospectus, including our consolidated financial statements and related notes, and the risk factors beginning on page 7, before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, we use the terms "Acme Packet," "our company," "we," "us" and "our" in this prospectus to refer to Acme Packet, Inc. and its subsidiaries.

Acme Packet

Overview

Acme Packet is the leading provider of session border controllers, or SBCs, that enable service providers to deliver secure and high quality interactive communications—voice, video and other real-time multimedia sessions—across Internet Protocol, or IP, network borders. Our Net-Net products, which consist of our hardware and proprietary software, serve as a central element in unifying the separate IP networks that comprise wireline, wireless and cable networks. Service providers can use our products to create a premium service tier that delivers next-generation interactive communications services, such as Voice over IP, or VoIP, with the same quality assurance and security as they historically have offered for voice services over their legacy telephone networks.

SBCs are deployed at the borders between IP networks, such as between two service providers or between a service provider and its business, residential or mobile customers. SBCs are the only network element currently capable of integrating the control of signaling messages and media flows. This capability complements the roles and functionality of routers, softswitches and data firewalls that operate within the same network.

We began shipping our Net-Net products in 2002. Since that time, more than 240 service providers in over 50 countries have purchased our products. We sell our products and support services through approximately 30 distribution partners and our direct sales force.

Our key advantages include:

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Significant experience in service provider deployments. We have significant experience in production deployments of SBCs, including by 21 of the 25 largest wireline, wireless and cable service providers in the world.


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Breadth of applications and standards support. Our products are capable of processing the most widely used real-time interactive communications sessions at wireline, wireless and cable IP network borders, and support a broad range of IP signaling transport and encryptions protocols, codecs, and addressing methods.


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Depth of border control features. We offer a deep set of session border control features for security, service reach maximization, service level agreement assurance, revenue and profit protection, and regulatory compliance.


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Responsive service and support. Our responsiveness to our customers' and distribution partners' new feature requirements, interoperability testing and problem resolution has been critical in deployments of our products.


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Carrier-class platform. We have designed our products to provide a carrier-class platform to satisfy the requirements of the complex, mission-critical networks operated by service providers.

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Proven interoperability. Through deployment in more than 240 customer networks, we have shown that our products interoperate with key products being deployed by major vendors for next-generation communication services.

Industry Background

Service providers traditionally have delivered voice and data services over two separate networks: the Public Switched Telephone Network, or PSTN, and the Internet. The PSTN provides high reliability and security but is costly to operate and is limited in its ability to support high bandwidth video and other interactive multimedia services. The Internet is capable of cost-effectively transmitting any form of traffic that is IP-based, including interactive voice, video and data, but it transmits only on a best-efforts basis and, therefore, service quality can vary significantly. Internet-based services are also subject to disruptive and fraudulent behavior, including identity theft, viruses, SPAM and hacking.

Service providers are beginning to migrate to a single IP network architecture to serve as the foundation for their next-generation voice, video and data service offerings. In order to provide secure and high quality interactive communications on a converged IP network, service providers must be able to manage and integrate the flows that comprise communication sessions for applications such as VoIP and interactive video.

Prior to the advent of the SBC, IP network infrastructure equipment, such as softswitches, routers and data firewalls, was able to initiate and route undifferentiated data but lacked the ability to target specifically the management of interactive communication sessions. We believe that there is significant demand for SBCs that can assure delivery of secure and high quality real-time interactive communications across all IP network borders. Infonetics Research, a market research and consulting firm specializing in data networking and telecommunications, predicts that the SBC market will grow from $86 million in 2005 to $613 million in 2009.

The Acme Packet Strategy

Principal elements of our strategy include:

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Continue to satisfy the evolving border requirements of large service providers. Our numerous SBC deployments in the wireline, wireless and cable networks of Tier-1 and other large service providers position us to gain valuable knowledge that we can use to expand and enhance our products' features and functionality.


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Exploit new technologies to enhance product performance and scalability. We will seek to leverage new technologies as they become available to increase the performance, capacity and functionality of our product family, as well as to reduce our costs.


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Invest in quality and responsive support. As we broaden our product platform and increase our product capabilities, we will continue to provide comprehensive service and support targeted at maximizing customer satisfaction and retention.


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Facilitate and promote service interconnects among our customers. We intend to increase demand for our products by helping our customers to extend the reach of their services and, consequently, to increase the value of their services to their customers.


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Leverage distribution partnerships to enhance market penetration. We will continue to invest in training and tools for our distribution partners' sales, systems engineering and support organizations, in order to improve the overall efficiency and effectiveness of these partnerships.

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Actively contribute to architecture and standards definition processes. We will utilize our breadth and depth of experience with SBC deployments to contribute significantly to organizations developing standards and architectures for next-generation IP networks.

Corporate Information

We were founded in 2000 under the name Primary Networks, Inc. and changed our name to Acme Packet, Inc. in January 2001. Our principal executive offices are located at 71 Third Avenue, Burlington, Massachusetts 01803. Our telephone number is (781) 328-4400. Our website address is www.acmepacket.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.

"Acme Packet," "Net-Net," "Acme Packet Session Aware Networking" and other trademarks or service marks of Acme Packet appearing in this prospectus are the property of Acme Packet. This prospectus contains additional trade names, trademarks and service marks of other companies.

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