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Uncertain Portfolio Roadmap Going Forward
BroadSoft Business Applications
While BroadSoft is clearly well positioned to augment Cisco's call-control portfolio immediately, the future of some advanced applications such as Team-One, UC-One, and UC-One Meet is uncertain. Both Cisco and BroadSoft have invested heavily in the messaging and meeting functionality of their respective application suites. While certain feature differences exist between Spark Messaging and Team-One, each can be further enhanced. Another important consideration is messaging integration with each vendor's portfolio. BroadSoft has enabled compelling Team-One integration with UC-One and UC-One Meet. Cisco has positioned Spark as a valuable add-on for HCS as well as a hybrid solution with premises-based UCM deployments. Current application traction and adoption are also critical factors. Verizon has launched Team-One, and another 135 providers worldwide have it in trials. Cisco has reported one million paid Spark users.
Rationalizing the conferencing and collaboration functionality within both portfolios will be even more challenging. In addition to Spark Meetings, Cisco's portfolio includes its market-leading WebEx solution, as well as its telepresence solutions. UC-One Meet is much less mature than WebEx, but integrates well with the rest of BroadSoft's business applications. After the acquisition, Cisco will need to make important decisions about whether to support the two full stacks or integrate all its various call-control platforms to a limited number of user-facing messaging and meeting clients.
Contact center is another area where the future of the combined portfolio remains uncertain. Cisco explicitly stated that BroadSoft's CC-One solution was an important factor in the acquisition decision. However, as a cloud-only offering, CC-One may be of limited appeal to the service provider community. To its advantage, however, CC-One integrates with third-party call-control platforms, including premises-based PBXs and UC systems, which broadens its applications and use cases. Team-One and Spark are also cloud applications; however they lend themselves more easily to the cloud delivery model and to integrations with both cloud and premises-based call-control platforms. Upmarket, CC-One competes directly with Cisco HCS for Contact Center. Cloud contact center is, however, an important growth area for UCaaS providers and it will be critical for Cisco to leverage BroadSoft's CC-One capabilities to better support its channel.
From a cloud applications point of view, Cisco can use the many puzzle pieces on the table to create different pictures. When developing its cloud roadmap, Cisco must also take its extensive portfolio of premises-based solutions into consideration. That's necessary so that it can offer compelling migration paths to its existing customers and effectively support hybrid deployments.
BroadCloud
Also uncertain is the future of BroadCloud, BroadSoft's cloud offering for the service provider community. In spite of some misinterpretations, BroadCloud doesn't compete directly with BroadSoft's channel, except in Germany, via the Placetel offering. It has, however, met with a somewhat mixed bag of success as most Tier 1 telcos have generally preferred to host, manage, enhance, customize, and integrate technologies on their own networks. BroadCloud has proved valuable to providers looking to address specific challenges, such as rapidly expand their geographic footprint, gain a faster and less risky access to UCaaS markets, enter compliance and regulatory-laden market segments such as government (FEDRAMP), retail (PCI) or healthcare (HIPAA), or launch differentiated vertical offerings (e.g., hospitality).
Cisco will face few technological barriers continuing to operate the BroadCloud offering. However, given its concern over channel conflict and/or need to rationalize its portfolio, it may choose to focus on supporting only advanced applications -- e.g., UC-One, Team-One, CC-One, and BroadSoft Hospitality -- via BroadCloud and let providers host the cloud PBX themselves. In an alternative scenario, BroadCloud may power Spark Calling for providers that wish to leverage the cloud model and trust their provider to deliver rapid innovation.
BroadSoft reports acceleration in BroadCloud adoption. As of 2016, BroadCloud supported 459,000 users (49% growth year-over-year), 56 channel partners (65% growth year-over-year), and $51.5 million in revenues (100% growth year-over-year). The service is available in 17 countries; availability in another 11 countries is pending.
As BroadSoft emphasized during last month's BroadSoft Connections 2017 customer and partner conference, providers can benefit from more frequent software update releases through the cloud offering. While the cloud PBX requires updates once a year on average, UC and collaboration apps require monthly or weekly updates. Given that large telcos can take months to implement major software upgrades, the cloud model can be particularly attractive from a time-to-market point of view. If Cisco makes both models available to the channel, each provider will need to make a choice between ownership and control, associated with the build (on network) model, and speed, associated with the buy (cloud) model.
Continue to next page: Much More Than UCaaS, Beyond Cloud UC and VoIP Connectivity, and Impact on Various Stakeholders in the UCaaS Ecosystem
