Cisco continues to pivot away from traditional markets through plans to acquire BroadSoft, as the tech giant attempts to reinvent itself as a software and cloud vendor.
Expected to close during the first quarter of the calendar year 2018, the US$1.9 billion buy builds on six previous acquisitions during 2017, including application intelligence specialists AppDynamics in January.
Specifically, the deal - coming four days after the acquisition of data streaming start-up Perspica - will allow Cisco to capitalise on the expanding collaboration market, leveraging service providers to target small and medium businesses.
Following days of speculation, the acquisition will also allow the vendor to further diversify away from its stagnating switches and routers business by giving it a stronger foothold in selling unified communications software to big telecommunications firms.
“Together, Cisco and BroadSoft will deliver a robust suite of collaboration capabilities across every market segment,” Cisco senior vice president and general manager of applications Rowan Trollope said.
Upon closure of the deal, Cisco plans to combine BroadSoft’s open interface and standards-based cloud voice and contact centre solutions delivered via service provider partners, with its own hardware and services portfolio.
“We believe that our combined offers, from Cisco's collaboration technology for enterprises to BroadSoft's suite for small and medium businesses delivered through service providers will give customers more choice and flexibility," Trollope added.
According to Trollope, the acquisition also reinforces Cisco's commitment to unified communications, while “enhancing its ability” to address the millions of ageing TDM lines poised to transition to IP technology and cloud native solutions over the coming years.
Founded in 1998, BroadSoft is a market leader in cloud unified communications and collaboration solutions, with a channel ecosystem that includes service and solutions providers across the world, including Telstra in Australia.
“We are excited about this transaction, which represents the culmination of a robust process undertaken by BroadSoft's board of directors to maximise shareholder value,” BroadSoft president and CEO Michael Tessler added.
“As businesses continue to move toward the cloud in search of simplicity and speed, joining Cisco will allow us to deliver best-in-class collaboration tools and services.
“BroadSoft's hosted offerings, sold through the service providers and aimed at small and medium businesses, are highly complementary to Cisco's on-premises and enterprise-centric HCS offerings. Together, we can inspire teams to create, collaborate and perform in ways never before imagined.”
Prior to the close, both parties will continue to operate as separate companies and upon completion of the transaction, BroadSoft employees will join Cisco's Unified Communications Technology Group led by vice president and general manager Tom Puorro, under the Applications Group led by Trollope.
“Cisco recently marked a significant milestone with our 200th acquisition,” Cisco vice president of corporate development Rob Salvagno added.
“Acquisitions continue to be a core part of our innovation strategy and over the past two years have helped Cisco accelerate or enter areas such as IoT, application intelligence, AI, hyperconvergence and SD-WAN.
“With the addition of BroadSoft, we expect to accelerate the pace of innovation across our entire collaboration portfolio.”
News of the acquisition comes after BroadSoft secured major cloud deals with both Optus and Telstra in Australia.
As reported by ARN, Optus Wholesale launched a new BroadSoft-powered, cloud-based Unified Communications (UC) offering for local service providers in September.
The new offering, dubbed Optus Cloud-UCX, provides Unified Communications-as-a-Service (UCaaS) across multiple devices simultaneously, while also providing wholesale partners the option to create and white-label their own UC products and brand all platforms to market as their own.
Aimed specifically for the needs of the wholesale market, the new solution is deployed using BroadSoft Business, with Optus the first tier one telco in Australia to deploy the communication software and service vendor’s BroadCloud platform as a complete cloud-based solution.
Meanwhile, BroadSoft also announced a multi-year strategic agreement with Telstra in April, signed in response to the growing popularity of a mobile workforce across Australian businesses.
Under this agreement, customers can connect via cloud communication and collaborate in the workplace from anywhere they have an internet connection, on all compatible devices, for full access to content and people.