Excitement is buzzing in the UC world, as Cisco announced that they would be officially expanding their unified communications stack with the purchase of BroadSoft for a price of $1.9 billion. The deal follows rumours that emerged in the marketplace back in August, suggesting that BroadSoft was exploring the possibility of a sale in coming months.
By accessing the potential that BroadSoft has to offer in the UC space, Cisco will be able to build upon their current HCS and Spark portfolio and work with some of the world’s most credible service providers (BroadSoft’s customers), with a stronger foothold in the SMB and mid-market unified communications market segments.
A Powerful Deal for Both Parties
From an investment perspective, the BroadSoft and Cisco partnership seems like a match made in heaven. After all, BroadSoft has a powerful SMB market share, while Cisco is known for making its mark in the enterprise. By coming together, the two brands will be able to earn the number one spot in the market, with a claim to more than 60% of the market if you consider the recent research from the Synergy Group.
This incredible acquisition should give Cisco more room to sell fantastic technology solutions in the coming years, as it continues to concentrate on disruptive technologies like the Internet of Things, Artificial Intelligence, and virtual reality.
It will be interesting to see what will become of companies like Yealink and Polycom, who previously earned much of their revenue selling SIP endpoints alongside the BroadSoft platform. The changing state of what Cisco can accomplish with BroadSoft in hand might mean that the UC marketplace sees some dramatic transformation in the coming months, and years.
A New Face for Collaboration
With the new deal underway, it makes sense that Cisco would inevitably continue to develop their SIP phone offerings to deliver features that other companies can’t provide, thanks to some proprietary signalling. Cisco already has a range of fantastic video conferencing solutions and collaboration strategies available, including the Spark board. There’s a good chance that BroadSoft will begin to expand their offerings naturally in these areas, to support the new business.
While both Cisco and BroadSoft have their own collaboration software apps to offer, the chances are that the BroadSoft options will be eventually absorbed into Spark, as it simply has more innovation to offer at this stage, including options in the world of VR (although testing is still in a beta stage). No matter what happens, it’s safe to say that the combination of BroadSoft and Cisco will contribute to a new potential leader in the UC space.
Other solutions for unified comms and collaboration, like Microsoft Teams, and the growing threat of Amazon may need to look out, now that there’s a new and powerful proposition available on the market. We can’t wait to see what comes next from Cisco and BroadSoft, and how they plan to work together for the digital transformation age.
Initial Reactions in Bite-sized Chunks
Having listened to various BroadSoft and Cisco partners in the past 24 hours since the announcement at BroadSoft Connections, here’s a few key points for consideration.
- The synergies are really quite perfect, Cisco needed UCaaS to complete their unified comms stack
- BroadSoft sells in-direct, so does Cisco – minimal conflict
- BroadSoft have a significant SMB market share, Cisco dominates the enterprise market – together they are one extremely compelling proposition
- Combined, they now claim more than 60% of the market if you take Synergy Research Group’s recent market research reports
- What will happen with partners like Polycom, Yealink, Snom (and recently Avaya) who sell their SIP endpoints onto BroadSoft platforms? Large portions of their revenue are apportioned to BroadSoft
- Cisco will inevitably develop their SIP phones to offer features that the others can’t via some proprietary signalling.. this could crossover onto the networking side with things like QoS to help differentiate Cisco against third parties
- Cisco has video conferencing and Spark Rooms, BroadSoft will naturally expand their offering in this area to include these value add-ons
- Both have team collaboration software apps, however Spark will likely win that fight if it comes to it…
- Cisco can bring it’s on-premise solutions to the party and provide BroadSoft customers with hybrid cloud options
- Cisco has CPaaS (formally Tropo), BroadSoft service providers are likely to be interested in this offering
- There’s an opportunity for BroadSoft (and customers) to work with Apple and leverage Cisco’s existing relationship
What’s your take? Comment below
We’re reporting live from BroadSoft Connections this week, read all the latest BroadSoft news here.