Cloud Comms Transactions – Channel Playbook

VoIP really blew up in the US in 2003. Broadsoft was finally signing up customers in 2003. The Coppercom softswitch was acquired in 2003 after launching VoDSL. CommX launched in Tampa in 2003 with a Broadsoft.

I was working with SIPMedia on MyPhoneCo in 2004. It was $7 per VoIP Line. That ran on a Nortel DMS-500 and the Level(3) SONUS network that Lumen is closing down.

Nuvio, Sentito, VayaIP, World Accxx, Starnet, Reywood, Phonetag, Peerio, ICG Voicepipe, i2, Cloudplus, Comm Partners, VoIP, Inc. (OTCBB:VOII), Smoothstone, M5, Vox, Voxox, VPF and 100’s of other companies were trying to sell VoIP from 2003-2008. Most were closed before UNE-P died. One reason was they couldn’t figure out how to get past the DSL routers of the ILECs. Another was the scattered approach to selling wholesale, retail, white-label to small, medium and large businesses. That approach never works. It screams: Please Give Us Revenue – any revenue!

I was a beta tester for AT&T CallVantage (2004) and Primus (2003) VoIP lines. I had to return the Cisco ATA’s they sent me when the trials were over. I recall that 44 minutes was the longest call you could make before the ATA overheated and dropped the call.

There was a battle over VoIP Protocols: MGCP and SIP. Cablecos (and AT&T) were using MGCP until 2006, when Comcast signed with NGT (later acquiring NGT), which was a Broadsoft white-label provider. That’s when MGCP started to phase out.

There were so many terms for this product: VoIP, IP Centrex, IP-PBX, Hosted PBX, Cloud Phone, Cloud PBX, and others until it got dumped into the UCaaS garbage can. Except for Vonage, RingCentral and 8×8, most providers weren’t growing, nationwide or branding. Then the pandemic hit and it all changed. 30+% Growth while everyone was asking for Zoom!

Many forget that PGi GlobalMeet was a video conferencing service that Siris acquired in 2015 for $1B that did not seem to get any traction during the pandemic. (PGi’s final gasp.) Cisco’s Webex built on Jabber was the best quality video calling software, but Zoom was the easiest to setup and use (best User Design!) — and was free! The rest is history!

Now, growth is single digits for cloud comms, just outpacing churn. Many providers are looking to sell — but have unrealistic ideas of valuation! A few are looking to buy at favorable rates.

There were 2 large deals this week.

CallTower and Momentum did a merger, since they share an investor, Court Square Capital Partners. CSCP has backed Momentum since 2018 and took a majority stake in CallTower earlier this year. CSCP is grouping voice and collaboration under CallTower, and leaving connectivity and infrastructure with Momentum.

CallTower adds 3,500+ customers and 250+ employees, for a total of more than 8,500 organizations.

Various websites put Momentum’s revenue at between $66M and $278M. With 450 employees (and 250 going to CallTower) at $500K per telecom employee is inline with the online search estimates of $200M.

It makes CallTower bigger, but also means they have to run a couple of versions of Broadworks on top of their Metaswitch and whatever else is legacy back there. The efficiency comes from consolidating all the platforms to one!