Nokia Siemens, a joint venture between Finland’s Nokia Corp. and Germany’s Siemens AG, had 74,000 employees on Nov. 1.

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I was on the phone with its two founders: Alon Maor, CEO; and Dan Sahar, VP of marketing. They had just started telling me about how they plan to sell network appliances that network operators — like, say, Comcast or Time Warner or Verizon — might put on their network in order to help them meet the growing demand for video content. The aim, Maor told me, is to get the most popular content as close as you can to the customer.

The first thing that popped into my mind was creating an appliance that sits on the network; close to, but not in the customer’s house. Maybe in the nearest network hub or central office. It turns out I was right. Then I wondered aloud what Qwilt might be using as storage technology. Could it be, maybe … flash memory? The chips that have so revolutionized the data centers of companies like Facebook and Apple and the banking systems of Credit Suisse, among others, when put to use by the likes of Fusion-io and Violin Technology?

Why yes, it does use flash memory, they told me, making them the latest member of the steadily growing “Flash Madness” club, which gives me yet another excuse to use the image taken from the cover of Flash Comics #1, circa 1940. For reference, the other members are Fusion, Violin Memory and Pure Storage.

Maor and Sahar laughed on the other end of the line at my guesses. “Would you like a job in our engineering department?” Sahar kidded me. I didn’t answer, because I wasn’t done guessing things like how Qwilt does what it does. “You must use some kind of algorithm to figure out what’s popular,” I said. Right again, mostly. The interview hadn’t been going for as much as five minutes, and I hadn’t even asked a single question and pretty much had it all figured out.

Well, not everything. There was the small matter of funding. Qwilt has raised $24 million in two rounds from Accel Partners, Redpoint Ventures and the Crescent Point Group, a fund based in Singapore. Maor is a Cisco veteran who got absorbed into that company following its $200 million acquisition of P-Cube. Before that, he was an engineer at Seabridge, which is now known as Nokia Siemens Networks. Sahar was director of marketing at Crescendo Networks, now part of F5 Networks. Tom Dyal, a Redpoint partner, is on Qwilt’s board.

Video is so popular with consumers that Internet services providers are struggling to get their networks scaled up to meet the demand, Maor says. The traditional way to solve that problem when everyone is watching the same show on Hulu, or the same movie on Netflix, is to just add routers and pray. That’s expensive. What if you could add some extra piece of gear that works with the existing network infrastructure? If you could figure out what was the most popular show in a particular neighborhood, make a copy of it right in that very neighborhood, and deliver it from there rather than all the way back from Hulu’s or Netflix’s data center, you’d lessen the network’s burden.

So that’s exactly what Qwilt does: It has three patents pending on processes for determining what video applications are being used on a network, and for figuring out what content is most popular in a particular area. So if you’re in a neighborhood full of “Jersey Shore” fans, the Qwilt box would figure that fairly quickly, and keep copies of it close at hand so that everyone gets their required daily dose of Snooki.

Also on Qwilt’s board is Rich Wong of Accel; Peter Wagner, an independent board member who has previously worked at Accel; Ohad Finkelstein, a partner at Crescent Point; and Giora Yaron, the former chairman of Mercury Interactive, which is now part of Hewlett-Packard. Also investing is Rob Glaser, the former CEO of RealNetworks.

Got all that? I told you it was an easy interview.

Under the terms of an agreement announced Wednesday, Huawei has agreed to withdraw its lawsuit against Motorola and Nokia Siemens Networks. In return, Motorola has agreed to drop its corporate espionage case against Huawei and pay the company a one-time fee to transfer some of its confidential information to NSN.

The size of the fee wasn’t disclosed, though Motorola Solutions said separately that it is lowering the price of the network equipment assets it’s selling to Nokia Siemens Networks to $975 million from $1.2 billion.

Coincidence, I’m sure…

In any event, the companies are both very happy to put this particular legal debacle behind them–particularly Motorola Solutions, which can now move on to the more important business of closing its NSN transaction.

“We regret that these disputes have occurred between our two companies,” Greg Brown, president and CEO of Motorola Solutions, said in a statement. “Motorola Solutions values the long-standing relationship we have had with Huawei. After reviewing the facts, we decided to resolve these matters and return to our traditional relationship of confidence and trust. I am pleased that we can again focus on having a cooperative and productive relationship.”

“Such a transfer, if consummated in its originally contemplated form, will result in the massive disclosure of Huawei’s confidential information to NSN, with irreparable harm to Huawei,” the company claims in its suit. “A large number of Motorola employees, many carrying direct knowledge of Huawei’s confidential information, would become employees of NSN. Huawei hereby sues to obtain preliminary injunctive relief to prevent such harm pending an arbitration under the agreements.”

An unfortunate turn of events for the Motorolae, whose newfound individuality is at least partially the result of the Nokia Siemens deal. Ironic, too, considering Motorola sued Huawei for corporate espionage last year.

The two companies are discussing terms, and a deal could be worth $1.1 billion to $1.3 billion, one of the people said. A deal could be reached in the next few weeks, people familiar with the matter said, though talks could still fall apart.

A Motorola spokeswoman declined to comment.

The Motorola unit in question mainly makes older-generation equipment for telecommunications networks, but would give Nokia Siemens access to offer its newer wares to those customers as they upgrade.

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Last year, Huawei posted net profit of $2.7 billion on sales of $21.8 billion. Dow Jones spoke with Kevin Zhang, vice president of global marketing, about the company’s strategy in the handset space and the telecom-equipment market outlook. The following is an edited version of the interview.

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But the acquisition is not without risks. It poses a massive integration challenge for Ciena (CIEN), the likes of which the company has never dealt with before. As Jefferies & Co. analysts wrote in a research note this morning, “We can’t think of anyone in Ciena’s management team that has ever been involved in–much less integrated–an M&A deal like this.”

Applied Materials (AMAT) could be next.

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