The Market Impact of Cisco's BroadSoft Acquisition

While Microsoft continued to discuss its transition to Teams at Ignite last week, Cisco Webex had a major outage that left customers without access to vital communications services. In spite of that outage, Webex has been an important part of the communications and collaboration experience for many people for many years, and it will continue to be so.

It's important to not forget that Cisco is also undergoing a big transition as it continues to incorporate and integrate the BroadSoft assets, personnel, and channel. When Cisco announced its intent to acquire BroadSoft almost a year ago, the communications market was shocked. Customers, partners, competitors, and analysts all wondered why Cisco would buy BroadSoft given that the two companies competed head-to-head in the business communications and contact center markets. Furthermore, speculation was rampant regarding what Cisco would do with the BroadSoft assets, capabilities, customer base, and partner channel (see "How Cisco-BroadSoft Acquisition Impacts UCaaS Ecosystem").

At the time of the acquisition, BroadSoft was the global leader in cloud-based voice solutions, with approximately 50 million seats deployed, of which 19 million were business seats. Cisco was the market share leader in large enterprise cloud-based voice deployments, with 5.5 million seats representing 75% share. Now, the combined company has 55.5 million cloud-based voice seats, of which 25.5 million are business seats. Combining the companies makes Cisco the undisputed market share leader in the business communications-as-a-service market.

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Figure 1. The impact of Cisco's acquisition on cloud-based telephony market share. (Image Source: KelCor, Inc. Data from multiple sources. Data reflects public cloud multitenant and dedicated seats and does not include private cloud deployments.)

Since the acquisition closed in February 2018, many decisions around marketing, branding, and product rationalization have been made, and it's clear the BroadSoft acquisition significantly changes the dynamics of the unified communications-as-a-service (UCaaS) market and the adjacent cloud-based contact center market. This article examines the combined Cisco-BroadSoft offering, describing the impact it could have on the business communications market. It also explains the go-to-market strategies, branding changes, product rationalization, and channel partner opportunities as I understand them.