Broadsmart to be acquired by magicJack, as UC market continues shift to the cloud  

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VoIP and internet phone service provider magicJack VocalTec has announced an agreement to acquire hosted UCaaS provider Broadsmart for $40 million. The acquisition is expected to close in the next 30 days, and reflects the on-going consolidation in the UC and collaboration market.

MagigJack is known for its invention of a disruptive USB VoIP device that allowed consumers to bypass traditional phone services and access cheaper voice services. However, its acquisition of Broadsmart is seen as a move into the far more lucrative world of enterprise business VoIP and UCaaS, as the gloss on consumer VoIP fades.

“We are pleased to be diversifying beyond our core business into UCaaS targeting high end SMB and enterprise customers,” said Gerald Vento, President and CEO of magicJack VocalTec.

Todd Correll, Broadsmart’s CEO, added: ‘We are excited to be combining Broadsmart with magicJack VocalTec. It will provide us greater resources to deliver additional managed services and solutions to our customers and channel partners. Tom and I look forward to providing the same high quality, high touch customer service that Broadsmart’s customer base has come to expect from the company.”

The deal is another indicator of how the UC market is maturing and undergoing significant transition with on-premise, hardware-based systems being replaced by software and cloud-based UC solutions and tools. As a result, according to Synergy Research Group, the UCaaS market is growing annually at around 16 per cent.

UC vendor consolidation

At the same time, the vendor landscape is consolidating. Last year saw notable acquisitions in the space, including Microsoft’s purchase of mobile app specialist Talko, Cisco’s acquisitions of video conferencing company Acano and cloud API specialist Tropo, Mitel’s purchase of mobile carrier Mavenir Systems, Avaya’s acquisition of UC&C company Esna Technologies, and Thinking Phone Networks’ purchase of video conferencing specialist Fuzebox, to name a few. Just yesterday UCInsight.com reported that Mitel and Polycom may also be in merger talks.

Nemteres Research’s annual 2015-16 UC&C Benchmark report also shows continued consolidation toward Cisco and Microsoft in large end-user organizations, as well as an increasing trend toward consolidation of UC applications onto a single-vendor platform. In 2014, approximately 26 per cent of participants had plans to consolidate, says the report. But that number jumped to 38 per cent in 2015, with a further 7 per cent planning to begin consolidation in 2016.

About Author

Gary Eastwood

Gary Eastwood has over 15 years of experience as a technology and business journalist and editor. He has held editorship positions on customer magazines for Microsoft, CSC, and EDF, as well as on B2B magazine Mobile Enterprise. He is the former Deputy Editor of Computer Business Review. In a freelance role, Gary has contributed numerous features and articles to a broad range of publications, including New Scientist, Computer Weekly, MIS, Marketing Week, Corporate Financier, Real Business, Wireless Business Review, and driven marketing communications projects for clients, such as Intel, the Confederation of British Industry, IBM, Logicalis, the Department of Trade & Innovation, and many others. Gary has written many white papers on a range of ITC subjects for Datamonitor. He is also an editorial photographer and business videographer, and has authored and ghost-written four books on photography. He is the Co-Director of EastwoodMiddleton Publishing, which provides contract/customer magazines for a growing list of clients, and publishes the B2B magazine for business leaders, Strategist.