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Summary

Cisco has announced its intent to purchase BroadSoft for $1.9bn. Although not a total surprise, the announcement was shared October 23, as BroadSoft held its Connections conference, which brought many of its service provider customers and ecosystem partners together. The acquisition will be the sunset of a worthy UC vendor challenger and new dawn for Cisco's collaboration portfolio, which is one of its major communications businesses. Immediate reaction to the merger was mixed among the service provider and partner ecosystem communities, despite the companies' positive messaging and positioning.

Cisco will need to move quickly to share more about the future of BroadSoft platforms and programs

BroadSoft said it was looking at strategic alternatives months ago, so the announcement is not surprising. BroadSoft has made some great progress in the past few years regarding its relationships with its service provider customers and its transition to more of a cloud-based platform and delivery model, including contact center services. Every major software vendor has been sharing its intention to move to the cloud, but BroadSoft executed on this transition well with its overall portfolio, although it was early in the adoption curve by its service provider customers.

Service providers and ecosystem partners were part of the channel and service extensions that made BroadSoft's model work so well. Although the merger means there will be one less vendor to bash, it may also solve one problem for service providers: having too many instances and/or vendors for collaboration.

Cisco must work quickly to review its product portfolio and share more about the integration of its total collaboration suite (e.g., Spark, HCS), service provider programs, and the details of how BroadSoft elements fit (or do not) within the larger Cisco collaboration suite. Ovum knows Cisco has a strong reputation for the successful integration of its numerous acquisitions, but this one may need to be completed at a faster pace to get its main channel and ecosystem partners to stay along for the ride. Cisco will need to continue to demonstrate what "open" means to its service providers and partners. Although customer choice was one of the major benefits touted in the announcements, channel choice may be more important as the merger details get unraveled in the early going.

Appendix

Author

Mike Sapien, Chief Analyst, Enterprise Services

mike.sapien@ovum.com

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