What Plans Might Siris Have for Communications?
As the private equity firm builds a communications portfolio, you have to wonder what its end goal might be.
In the past year, Siris Capital Group has been strategically acquiring communication companies around the world, with Polycom being the latest company to come into its crosshairs.
As reported on No Jitter and elsewhere, in April Polycom entered into a $2 billion deal with Mitel to combine the two companies. But like a swift wind on a cold day in Chicago, three months later Siris swept in to acquire Polycom for $2 billion in cash, and take it private, instead.
For Mitel, that move poses a few questions that will probably get answered in the coming months. What other companies might Mitel be vetting as targets for merger or acquisition? And how will Mitel's strategy change now that Polycom is off the market?
In addition to its July acquisition of Polycom, Siris bought Xura, the recently merged Comverse and Acision communications provider, in May for $643 million in cash. To add to this list, Siris acquired collaboration software provider PGi in September 2015, for an unknown amount.
So just what is Siris up to? Well, there is certainly a trend of large companies making key acquisitions to strengthen their footprints in the communications-as-a service (CaaS) market.
Cisco, Microsoft, and Vonage are a few making big bets that this market will continue to grow at an exponential rate. Microsoft's acquisition of LinkedIn for $26 billion back in June and Vonage's acquisition of Nexmo, a cloud communications platform, for $250 million in early May speak to this trend, not to mention Cisco's purchase of Tropo last year, speak to the trend.
Is Siris looking to enter the market by incorporating hardware from Polycom, communications from Xura, and software from PGi? It seems like it is playing chess and maybe close to putting the communications industry in checkmate by entering the "Communications Gold Rush."
As I've said before, I believe traditional telephony will fade away to become what we call "smart communication," and companies like Twilio, Nexmo, and perhaps Siris providing innovative ways to enhance communications will lead the revolution.
WebRTC, in particular, gives us the ability to communicate in smarter more efficient ways by adding real-time communications capabilities to applications through the use of live audio and video streaming, screen sharing, secure document sharing, traditional telephony integration, and much more. And mobile apps also present one of the biggest opportunities for businesses to deliver cross-channel engagement. Brands care about keeping consumers engaged with their websites or apps, and one of the best ways of doing that is by providing customers with a rich, connected communications experience. With smart communication functionality built directly into apps or websites, a brand can keep consumers connected and, more importantly, engaged.
That is why smart communication has become mission critical for companies by offering value to many aspects of business, including customer service, training and internal communications. When you look at the success of online influencers like Snapchat that have made their names through online video and messaging, it's also clear that there is a demand for better visual communications, which can be accessed remotely online and on the go.
It has certainly been an exciting year for the communications industry so far and with four more months to go, anything can happen. Just this week we saw the "anything" happen in the contact center/customer experience realm with Genesys' announced acquisition of rival Interactive Intelligence for roughly $1.4 billion. Presumably Genesys will want to use Interactive's cloud-based PureCloud contact center solution to broaden its own portfolio amid a shifting communications landscape.
I predict that there will be a few more key acquisitions taking place in the industry before the year is up, particularly when companies like Twilio continue to demonstrate such strong growth. As a result, I believe we will start to see more and more movement from large players, like Siris, looking to capitalize on the communications market. I look forward to seeing how everyone else reacts to that.