**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from August.**
With the impending acquisition of 19-year old BroadSoft Inc. by Cisco, the global communications software service provider has an exit strategy. But what strategy does Cisco have in mind for the BroadSoft portfolio and how does that mesh with its cloud road map?
While there are no firm answers just one day after the deal was announced, the $165 billion company has been vocal about its strategy for products such as Hosted Collaboration Solution (HCS) and Spark. But now that it’s turned up the volume with the BroadSoft news, that message is a bit muddied. What is clear, however, is that the $1.9 billion acquisition buys Cisco a fast track to a full, multi-tenant SaaS collaboration solution, partnerships with more than 450 telecom carriers in 80 countries, and about 19 million BroadSoft business subscribers.
“It’s as if the train had already left the station [for Cisco],” Art Schoeller, vice president and principal analyst at Forrester Research told us. “Nine times out of ten, BroadSoft was what I call the ‘weapons merchant,’ the white-label solution for many Tier 1 carriers … it’s cloud, multi-tenant, and BroadSoft has already worked through the economic model of working with a partner ecosystem that’s driving subscription solutions, not premise[s] solutions. So, Cisco trying to get traction in the market for its multi-tenant solution, i.e. Spark and the future of Spark … the channel says, ‘I’ve already got one, BroadSoft.'”
Schoeller thought he had a pretty good fix on Cisco’s UC and collaboration road map to cloud, which he noted is HCS for cloud – hosting their single tenant premise software, Cisco Call Manager, Cisco Contact Center Express, Cisco Call Center Enterprise, that’s also delivered to the market on premises with Cisco Business Edition 6000 and 7000 offerings – and Cisco Spark for a multi-tenant strategy; he was a bit surprised when he heard about BroadSoft.
“While it might mean change for Cisco in terms of its strategy, at the end of the day, the bottom line for Cisco is that this accelerates its pathway to a full SaaS solution and puts them out there with an incredibly sized base and channel, which is very important to Cisco,” Schoeller said.
Jon Arnold, industry analyst and principle at J Arnold & Associates, said that Cisco needed a move like this to keep pace with how the market is evolving, as carriers move away from hardware-based, capital intensive infrastructure and toward cloud-based alternatives.
“BroadSoft has such a strong footprint across the world, especially with Tier 1 carriers such as the AT&Ts and Verizons of the world. This gives Cisco, [which is] already selling the carriers’ infrastructure, a complete platform opportunity to get into selling services to businesses, as these carriers become an important channel to selling …