Business VoIP and Unified Communications are by no means quiet markets. It isn’t too much of a surprise to frequently learn of a two industry leaders joining forces, or a smaller fish being swallowed up by a much bigger fish. So of course, every year we see a fairly good number of mergers and acquisitions — and 2018 was no different.
In fact, 2018 had some fairly interesting moves being made from some pretty big names. We’ve seen competition become absorbed as the market consolidates, as well as multiple different solution providers snatching up that missing piece to their puzzle, bringing in a new set of functionality into their platform.
So to make sense of it all, we went ahead and put this list together, ten of what we feel were the most groundbreaking acquisitions and mergers in VoIP and Unified Communications in 2018.
Known for their expansive cloud and online conference solutions, LogMeIn has also begun branching further into the Unified Communications market. In fact, prior to 2018, LogMeIn merged with Citrix, introducing the Grasshopper Business VoIP platform into their portfolio.
But Grasshopper is more suited towards Entrepreneurs and really small organizations — so to bolster their Business VoIP even further, LogMeIn went ahead and snatched up Jive back in February of this year for $342 million in cash.
By absorbing Jive Communications, LogMeIn has gained access to a much more expansive Business VoIP solution, a complete Unified Communications as a Service platform, even more video conferencing functionality to pair well with GoToMeeting, and even Jive’s SD-WAN capabilities.
This addition of Jive’s already award-winning platforms has helped LogMeIn really gain some ground onto the UC&C field, expanding from meetings and conferences in to all out Unified Communications.
Over the last few years, Fusion has continued to grow as a major cloud service provider, offering a large umbrella of solutions to varying industries and organizations. Along their path of expansion, Fusion acquired Birch Communications to gain additional foothold within the North American market through an expanded unified communication offering.
To push even further, Fusion three days later announced they were acquiring Megapath — and did just that for $71.5 million in May of this year. By adding Megapath, Fusion managed to gain an estimated $67 million in annualized revenue, mostly through monthly reoccurring subscriptions to the existing Megapath services — mostly from Megapath’s Unified Communications platform, as well as SD-WAN and security services.
Not only did Megapath’s existing portfolio line up with Fusion’s, Fusion CEO Matthew Rosen explained they “expect[ed] the Megapath acquisition to facilitate the customer, operation and financial integration of Birch, enabling us to drive’ Fusion’s strategy more efficiently across the entire organization.”
Vonage has been on a bit of a roll this year, with announcing a new collaboration platform, hosting their first analyst event, as well as not one but two major acquisitions. To stick with chronological order of events, we first wanted to highlight Vonage’s acquisition of TokBox, which is particularly interesting. TokBox was the industry-leading WebRTC video API provider. Essentially, through TokBox provided APIs, organizations could embed live video, interactive video and even voice chat right into a website or mobile app.
So, Vonage has been playing some interesting cards lately. The introduction of their messaging APIs on the Nexmo platform illustrates a continued effort of innovation, and it wouldn’t be too far of a stretch to see how TokBox could fit right into this mix, as well. Overall, Vonage is still looking to expand its digital footprint, as we saw at their analyst event. TokBox is a piece of that puzzle, enabling Vonage to continue along their path of innovation.
Don’t just take my word for it, CEO Alan Masarek had explained that “the addition of the TokBox team also brings a workforce of skilled technologists to help accelerate our pace of innovation.”
While not a typical acquisition, Star2Star and Blueface have merged to establish an entirely new entity, what will be known as StarBlue. While the financial details of the transaction were not disclosed, this new combined organization will stand as a “top five” player within the existing Unified Communication markets. With the capability of serving North America Markets along with Europe, the Middle East and Africa, StarBlue will have a fairly impressive global reach.
With this new global workforce of about 500 employees, StarBlue will actually split their efforts. Star2Star will continue to operate within North America, while Blueface will continue to operate within the EMEA markets. Executive Chairman of Star2Star and Blueface explained how the merger will leverage both providers to “create” a combined company with the breadth of capability, reach and innovation to be a true global leader in the UC space.
“For now, it is very much business as usual and there will be no change in branding or in the preservation of vital relationships with our partners and customers across our services in Star2Star and Blueface. In the not too distant future, we shall bring further enhanced innovation-led offerings across a full spectrum of products to our partners and customers and to the wider market which leverages the best of both companies’ capabilities and talent.”
Way back at the beginning of this year in January, I had the chance to attend Avaya’s annual Engage conference, during which Avaya highlighted not only the organization’s latest mission and direction, but also their latest acquisition. In an effort to undergo a digital transformation — shifting platforms, services and functionality primary into the cloud — Avaya also set their sights on expanding their existing capabilities — one way of which would be by leveraging both automation and Artificial Intelligence.
One way to do this was through the Acquisition of Spoken, an Enterprise cloud Contact Center solution provider. And, with a very strong focus on Artificial Intelligence, Spoken is a particularly interesting provider for Avaya to introduce into their family.
With deep learning and AI technologies, Spoken’s Intelligent Wire automation tool not only provides real time insight, but also enables agents to focus more directly on the interaction at hand. Avaya recognizes that these technologies will be a critical capability for just about every business in every industry in the near future, and jumped ahead of the game by acquiring Spoken.
After an exciting few years of potential acquisitions and mergers, and just when we thought Polycom was finally going to lay low for a while, big news struck. Back in March of this year, Plantronics announced they would be acquiring Polycom for a massive $2 billion, in order to form a new endpoint giant. Of course, there will always be the goal of absorbing and eliminating your competition, so while this was a surprise it absolutely makes sense — more so than the potential Mitel acquisition.
According to the joint press release from both organizations, this move will “further accelerate Plantronics vision of an enterprise that is able to leverage powerful analytics, video and audio touchpoints to ignite all new communications and collaboration experiences.”
Essentially, Plantronics was looking to absorb Polycom’s tech and solutions, enabling them to offer the most compelling products by leveraging analytics, video and audio from both portfolios. At the end of the day, this merge does make a lot of sense, especially from Plantronics’s point of view.
So, after their TokBox acquisition, Vonage wasn’t quite done just yet. Just a month later, in September, Vonage announced their agreement to acquire NewVoiceMedia, an industry-leading cloud contact center provider, for $350 million. Based in the UK, NewVoiceMedia directly provided service to about 700 mid-market and enterprise customers, including some rather large names like Adobe, Siemens and Time Inc..
Vonage not only grabbed NewVoiceMedia to bolster their Enterprise contact center portfolio, but to strengthen CRM solution integrations as well — specifically with Salesforce. In fact, NewVoiceMedia considered themselves as “cloud contact software designed for Salesforce,” with deep integration between the two platforms.
During their investor presentation, Vonage even outlined that the acquisition would enable them as a provider to offer a single combined UCaaS and CCaaS platform and therefore a stronger sales footprint and penetration of mid-market and enterprise clients globally. Essentially, Vonage gains a new CCaaS platform with deep CRM integration and go-to-market relationships, like with that of Salesforce.
If there was one major theme for 2018 VoIP acquisitions, that absolutely seems to be Artificial Intelligence. RingCentral also snatched up some of the latest AI tech through their acquisition of Dimelo.
While RingCentral didn’t disclose the financial details specifically, they did state that the deal will not have a “material financial impact” on the provider’s year. Designed as Digital Customer Care software for the Enterprise, Dimelo enables businesses to organize every single digital customer relation channel into one platform.
This essentially means that organizations can combine email, Facebook Messanger, SMS, social media, and any other digital communication channels they utilize all into one single integrated platform. The mean idea is that organizations are then more capable of providing a consistent customer experience across multiple channels.
With Dimelo solutions, including Dimeolo Social, Dimelo Chat, Dimelo Mobile, Dimelo Mail and Dimelo communities, RingCentral has managed to boost Enterprise capabilities, while placing a strong focus on the improving the customer experience and interactions in this new digital world.
Towards the end of this summer, Twilio announced that the fine folks from Ytica would be joining their team. Ytica’s analytics-driven Workforce Optimization software was a bit of an interesting choice for Twilio at first glance.
But this move comes months after Twilio had introduced their latest solution, a contact center platform called Flex. Flex had a bit of a soft launch in March, with PSTN support, VoIP embeddable in web and mobile apps, video with screen sharing and co-browsing, both text and picture messaging, support for social media and even Facebook Messenger.
Flex also had a vast majority of the expected contact center features like skills-based routing, IVR, multichannel support, transfers, and the lot. But of course, Twilio didn’t have everything a contact center would need — and that is where Ytica came in. Ytica’s unique WFO platform enables contact centers to gain control over their data, and utilize it to uncover new insights and fuel informed decisions.
In essence, Twilio is continuing to round-out and grow the Flex platform, and wasn’t afraid to bring in the experts necessary to do so.
Here we go again with the Artifical Intelligence. Dialpad has been making some interesting moves all around lately, what with their introduction of free Business VoIP to the Dialpad pricing structure. To make things even more interesting, Dialpad recently snatched up some new AI tech by joining forces with friends at TalkIQ.
According to a TechCrunch interview, Dialpad Ceo Craig Walker said the company was searching for a real-time AI solution, but was disappointed to find many didn’t exist yet — except for TalkIQ.
Well, long story short, both providers had their start back working under Google, and TalkIQ had even gone on to build their platform ontop of the Google Cloud Platform, just like Dialpad. So by snatching up TalkIQ’s resources, Dialpad was able to introduce real-time sentiment analysis and artificial intelligence into their platform.
In fact, we just recently covered Dialpad’s announcement of an AI powered Call Center just earlier this month. Clearly this acquisition is already starting to pay off.
The Bottom Line
Without a doubt, 2018 was a busy year from the Unified Communications and Business VoIP markets. We thought that last year had some twists and turns, but 2018 was an even bigger shocker with some pretty big power plays. Plantronics joining forces with Polycom in particular was one we did not expect to see, as Twilio’s initial introduction of a contact center had us wondering where they would continue to go.
At the end of the day, Artificial Intelligence clearly seemed to be a hot-point for a good number of these acquisitions and mergers, and for good reason. Artificial Intelligence is truly beginning to creep its way into real world uses, and business communications seems to be at the forefront of that innovation. Understandably, every provider wants to be first to offer the best, and what better way to get ahead than by finding those who already do it best?
It will be interesting to see how these acquisitions come to fruition in 2019, and what trends will continue to merge in the next few years.