Lots of deals happening.
SONUS and Genband have completed the merger and changed the name to Ribbon Communications.
SoftBank might be calling off talks to merge Sprint and T-Mobile, according to Reuters.
Master agency M&A: the first of a few maybe? Telarus buying CarrierSales.
In the BSFT-Cisco deal, there have been many viewpoints.
Q Advisors, who have been advisors to a number of BSFT powered providers, has this to say:
“In Q Advisors view, Cisco’s acquisition of BroadSoft is a logical fit for both parties and will dramatically shift the UCaaS landscape. For Cisco, the integration of BroadSoft’s BroadWorks and BroadCloud solutions will lead to a major transformation of Cisco’s unified communications and collaboration (“UC&C”) business. The BroadSoft portfolio makes ideal strategic sense in combination with Cisco’s UC&C business, filling a huge gap in Cisco’s cloud strategy.”
Evolve IP is a BSFT client. They posted this response to the news.
My favorite point: “But according to Frost and Sullivan’s most recent North American Hosted IP Telephony and UCaaS Market Forecast, Hosted IPT and UCaaS currently make up only 9.9% of the addressable market in the US.”
I have written 3 articles about the deal.
The ripple effects of the deal as I see it.
With Genband+Sonus=Ribbon and Cisco+BSFT, that leaves netsapiens and Metaswitch. Metaswitch is probably wondering what to do.
“8×8 says its total revenue was $72.5 million in Q2 2018, up 15 percent from the corresponding quarter last year. Also, service revenue from mid-market and enterprise customers rose 28 percent, and now represents 58 percent of the company’s total service revenue.” [channele2e]
Now 15% is nice, but the analysts have been saying 20-30% growth. Even Evolve IP quotes Frost as saying, “With an annual expected CAGR of between 20-30% YOY for the foreseeable future!” That is just not happening! In fact, what I am seeing:
All the UCaaS guys are going up-market to mid-market and above because sales take as long but affect revenue numbers better (it takes 1 big deal instead of 20 small deals). Up market affects revenue because price per seat drops as the deal gets bigger.
I think it all slows down at this point. UCaaS sales are not easy. And there are too many players. Fourteen years in and less than 10% market penetration by 2000 providers = that is some poor execution!
CPaaS is where the market is heading since most HPBX sales are “forced” because businesses don’t like Change – and when sold correctly cloud (especially cloud comm) is Change! Lots of businesses just want dial-tone and a few other features; hence, the Cable Giants winning the incumbent voice war with SIP trunks. XO has 2 million SIP trunks on BSFT. Windstream has 1 million on BSFT.
CPaaS is just fancy SIP trunks with SMS capability – and the ability to “glue” other functions and apps on it. THAT is the future of cloud comms.
BSFT gave up. Cisco made a good buy. It fits their business plan as the Cisco Powered Network.
Polycom, Yealink, Grandstream, Edgewater, Mitel, ADTRAN and others will take a hit because Cisco Leasing combined with a “Cisco Powered Network” means Cisco handsets, Cisco switches, Cisco IAD, maybe even Cisco SBC.
SD-WAN is making some hardware vendors nervous. Those white boxes that are used for CPE are not Cisco Powered or ADTRAN either. Sales are shifting.
Microsoft is still killing it with Office365 and the rest of their suite (Skype4B, Teams, Dynamics). When they integrate that all into a single stack with WebRTC, it will either implode or explode.
Be interesting to see what Metaswitch and Amazon do next.
The non-BSFT based UCaaS Players – 8×8, RC, fuze, Jive – better take advantage of any integration time they have to either sell, merge or make hay!