Robin Gareiss
Robin Gareiss is president and founder of Nemertes Research, where she oversees research product development, conducts primary research, and advises...
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Robin Gareiss | October 24, 2017 |


Cisco-BroadSoft Deal: Big News, Poor Timing

Cisco-BroadSoft Deal: Big News, Poor Timing Details emerge on future strategy for combined company, but questions remain.

Details emerge on future strategy for combined company, but questions remain.

Most BroadSoft employees started their Monday excited about sharing product strategy and innovations at the company’s long-planned annual Connections conference in Phoenix, Ariz. Then they read the news: Cisco announced plans to buy the company for $1.9 billion.

The timing could have been better.

As the day moved along, the previously planned product strategy presentations still took place. Partners still met with customers and one another to discuss product and integration strategies (albeit with some uncomfortable smiles to unanswered questions). BroadSoft still issued its eight press releases of notable product enhancements (more to come on that soon).

But the undercurrent of all the day’s activities was: What are Cisco’s plans with the UC powerhouse, which fuels numerous Communications Service Providers’ (CSP) UCaaS offerings?

Executives presented the (very) high-level strategy to analysts. To their credit, Rowan Trollope, Cisco SVP/GM of the Applications Group, and Michael Tessler, BroadSoft president and CEO, also fielded questions from a room full of curious analysts. Here are some highlights of the session:

  • Cisco is bringing BroadSoft in right at the core, and between the two companies’ technologies, they claim to be able to serve any size customer from the cloud (something neither did well alone).

  • There will be no changes at this point with any of BroadSoft’s plans for product enhancements, business improvement, and innovation.

  • That said, Trollope added that Cisco needs a single offer overall and will be evaluating product/feature overlap. Specifically, it will “rationalize” Spark Call in order to have a single face to the market. The BroadSoft technology will enable Cisco to “take a big step forward…from where the Spark Call technology is now,” he said.

  • BroadSoft’s technology will continue to serve the small and midsize business market; Cisco and its CSP partners will continue to serve the enterprise through Hosted Collaboration Solution (HCS). But, Tessler says he anticipates the BroadSoft portfolio will move up-market because of the acquisition.

  • Cisco will leverage Spark APIs for integration between technologies and existing partners.

  • Cisco is very interested in BroadSoft’s voice and contact center capabilities, but no more details were provided as to what will happen with Cisco’s corresponding services.

  • Looking at the innovation Cisco has delivered to the enterprise, Tessler said there is “huge opportunity” to deliver some of that value to the midmarket.

  • Cisco has not been able to scale HCS down to meet the needs of the SMB as BroadSoft has; the acquisition will move Cisco into that market immediately.

  • Cisco hopes to have seamless integration of calling into the next-generation Spark client.

  • There is very little overlap in the existing client base. Less than 10% of BroadSoft’s clients are in the enterprise space; most are 1,000 employees and less, Tessler said.

  • They have made no decisions on branding and whether Cisco will keep the “powered by Broadsoft” marketing program.

  • The marketing focus moving forward for all cloud UC products will be on end-user productivity.

During another Q&A, when analysts tried to drill down into how Cisco plans to use BroadSoft’s voice and contact center plans, BroadSoft Chief Technology Officer Scott Hoffpauir and co-founder seemed somewhat at odds about not being able to answer questions: “These are probably better questions for Cisco,” he said simply.

Another outstanding question relates to BroadSoft’s 18-month-old initiative into targeting enterprises, including selling directly to them, with some documented success. If Cisco is going to continue focusing on the enterprise market with HCS, yet BroadSoft has been making inroads into the large enterprise space directly, how will they reconcile the two strategies? BroadSoft board member Andy Miller said it’s too soon to answer that question.

Several very tired-looking executives at the conference, presumably working on last-minute messaging over the weekend, are making valiant efforts to address many questions. But most of the detailed questions will remain unanswered, at least for this week while customers and partners gather at a conference designed to educate them on product strategy. Again, the timing…

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