Telco network solutions provider Activeport (ASX: ATV) and business partner Radian Arc have entered into a $4 million licence and offset agreement, through which Radian will acquire a perpetual licence from Activeport for specific cloud gaming software.

The proceeds from the deal will be used to grow sales of Activeport’s Global Edge network orchestration software and expand its network-as-a-service (NaaS) portal.

Since 2020, Activeport and Radian have collaborated to develop a high-performance, low-cost cloud gaming platform that is now contracted to more than 80 telecommunications providers with a combined consumer base of almost 3 billion.

Other agreements

In addition to the perpetual licence, Activeport and Radian have a $3.4m licence distribution agreement for the Middle East and a $3.9m loan facility.

The outstanding loan balance and all accrued and unpaid interest at the completion date will be deducted from the new contract, with net funds payable in cash to Activeport.

Net funds paid to Activeport are currently expected to exceed $4m, with the final amount depending on the timing and negotiation of a formal agreement.

Core software

Radian currently pays Activeport approximately $84,000 per month for software licences and infrastructure support for all cloud gaming customers.

The new licence agreement is expected to grant Activeport the time and funds to focus on its core Global Edge network orchestration software, designed to accelerate ‘time to revenue’ while improving customer satisfaction.

The product automates data centre and cloud provider connections and uses a single interface for ordering, provisioning, billing and support to enhance overall business efficiency.

Non-core business

Activeport chair Peter Christie said revenue from the Radian deal would be reinvested into software development.

“Cloud gaming is a vertical market product that complements network orchestration but is not our core business,” he said.

“This agreement provides us with more capital to focus on network orchestration.”

Radian chief executive officer David Cook added that, while Activeport’s software engineering expertise was crucial in enabling his company’s launch into cloud gaming, Radian is now at a point where it can manage development tasks in-house and broaden its focus into virtual computing and artificial intelligence applications.