Though mostly positive, we have seen various commentary on Cisco’s BroadSoft acquisition over the last couple weeks and it has kept all of us fairly busy. What Cisco will decide to do with BroadSoft products and channels post-acquisition is yet to be seen, however we would like to provide some commentary with market figures and facts, and what this means to the enterprise communications market.
- Cisco will have the largest IP PBX installed base
It is well known that BroadSoft, with the BroadWorks and BroadCloud platforms, is the “Hosted PBX & UCaaS Market” leader from both installed PBX and new line shipments perspectives. Cisco, being the 2nd in both, now can claim market leadership in both SMB and Large Enterprise, where cloud business was struggling to address down market.
In addition to cloud, Cisco was competing for market leadership from an aggregated market view as well. BroadSoft was the first cloud only vendor to penetrate the top 7 and now, with the BroadSoft’s base, Cisco can claim installed base market share leadership in front of Avaya, who is struggling with Chapter 11 obligations and move to the cloud.
Source: Synergy Research IP PBX Premises, Hosted & Cloud Call Control Market Report, Q2’17
- Cisco will strengthen its market leadership position in cloud contact centers
According to Synergy Research’s upcoming Cloud Contact Center research, Cisco already has the largest cloud contact center installed base globally. What is more interesting about this acquisition is that BroadSoft is also bringing a very sizeable CCaaS installed base, predominantly based on its BroadWorks platform. So, Cisco not only receives a leading native, scalable and proven cloud based CC-One offering, but also one of the world’s largest installed base through BroadWorks CC agents.
- Cisco will have a strong SMB cloud presence
Even when BroadSoft’s massive ~17.5M BroadWorks base disregarded, BroadCloud still remains one of the largest SMB players in the UCaaS market, competing with the likes of RingCentral & 8×8. With the fine mix of retail and wholesale, increasingly digital offering and investments to address up-market, Cisco to become one of the largest SMB UCaaS players and positioned very strongly to address the needs of mid-market with its brand, distribution and products. It all depends on execution, but competitors will be going against a stronger rival. In addition, the multi-tenant call control capabilities are just a perfect fit for Spark, which Cisco has been struggling to develop.
With BroadSoft beating Q3 revenue and EPS expectations and YoY growth fueled by subscription and maintenance support, Cisco seems to have banked an acquisition to further increase its recurring revenue from subscription-based services, as Cisco CEO Chuck Robbins laid out.
Congratulations to my friends and former colleagues at BroadSoft, and of course to Cisco, who has taken a huge step to fulfill some of the standing gaps in its portfolio and further enhance its leadership position in the Enterprise Communications market.
Guest Blog by Fazil Balkaya, Principal Analyst, Balkaya Consulting
More: The Cisco/BroadSoft Deal: Will Cisco own the Market?
