Cisco’s acquisition of Broadsoft shows their strategic direction

It’s been an interesting week for us here at Amtech, digesting the news after Cisco announced that they are buying Broadsoft for just shy of $2 billion.

So what does that mean for the industry and how does that align with what we are seeing?

Over the past 12 to 18 months, the prevalence of hosted and cloud telephony products and requests from our customers have increased significantly. This latest announcement fits very strongly in line with where Cisco have been moving for the last few years. They have been moving away from their traditional on-premise ‘piece of tin’ on a customer site and moving towards a ‘per user per month’ software subscription model.

Cisco Spark was the start of this and was obviously aimed at competing with Microsoft Skype for Business. It is well known that Cisco were having issues in getting the cloud telephony element of this working and therefore getting customers to sign up to this. Whilst improvements and an increase in features in Spark have been rolled out frequently, the missing element of cloud telephony was a major problem. This acquisition should pave the way for this all to be integrated at some point in 2018.

For those who are unaware, Broadsoft is and has been the market leaders in cloud PBX’s for a number of years. Their platform allows developers to create applications and integrations and is used by some of the world’s leading service providers. Whilst the exact direction that this acquisition will take and how it will integrate with Spark and the other market-leading Cisco products is unknown, it is sure to assist Cisco in completing their cloud journey. One of their most recent products, the Business Edition 4000, is already a ‘cloud managed’ solution (very much like Meraki does for networking equipment) so there is a natural progression here.

Some of the questions and responses I’ve already seen from some industry peers is how this will affect the on-premise solutions such as Cisco Call Manager particularly in the form of the Business Edition 6000 and 7000 platforms. Some have said that this spells the death of the on-premise system.

What do I think?

Personally, I don’t see this happening in the short term. There are far too many recent deployments out there for this to be the end of the line. I actually see this complimenting these devices and creating a clearly structured roadmap for a customer’s migration to the cloud should they wish to take that journey. What I do know is that this should elevate Cisco higher in terms of their market share in Unified Communications and Collaboration and could become the acquisition that makes then the clear market leaders.

Only time will tell but 2018 looks to be a very interesting year in our industry.

Author: Dave Melin (Managing Director, Amtech Business Solutions)

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