Last April, NEC dropped its first shoe when it announced its exit from the PBX business outside Japan. it marked a dramatic shift for a company that once ruled the PBX market. Like most of the PBX/UC industry, NEC struggled to keep pace with the transition to cloud-delivered telephony. Microsoft and Cisco made the transition but did so with strategic acquisitions – think Skype, Metaswitch, and BroadSoft.
The company does have a UCaaS offering called Univerge Blue, which it did not exit last April — and ended today. Intermedia announced it would take over sales and support of the Univerge Blue service it was providing to NEC outside of Japan and Australia.
NEC is exiting the telephony business outside of Japan and a few other selected markets. The company started in telephony in 1898, so they had one helluva impressive run.
“We are happy about [NEC’s exit],” Michael Gold, CEO of Intermedia, told me yesterday. “We'll be able to give more resources, people, and dollars [to the expansion opportunity.] We think we'll be able to grow it faster."
The current version of Univerge Blue UCaaS is powered by Intermedia. Known for its full suite of UCaaS and CCaaS solutions, cloud-based communications platform Intermedia also offers hosted email, cloud-storage, archiving, and Microsoft Office 365. Intermedia is not a household name in the UCaaS space because many of its clients, including NEC, rebrand its services. Still, Intermedia is a fast-growing provider.
Although it has the right to retain the Univerge Blue brand, I expect Intermedia will revert to its own Unite branding. This move will trigger a small but immediate bump in revenue as it will now realize the top-line revenue from Univerge Blue instead of the wholesale revenue it was earning.
After NEC announced its retreat from premises-based PBX market earlier this year, it encouraged its customers to move to Univerge Blue. For customers that wanted to stay with premises-based and private cloud solutions, NEC did not offer any guidance. I figured by now, someone would acquire NEC’s legacy PBX business, including the inventory of phones and PBX parts, but it hasn’t happened (yet?).
I appreciate why NEC likely opted to stay in UCaaS and CCaaS at first. With Intermedia doing the hosting and product development, eliminating the business offered no significant savings. However, the UCaaS and CCaaS business doesn’t fit NEC either. NEC’s portfolio has been shrinking steadily in the US, which is known today for servers and storage. Intermedia’s acquisition of NEC’s UCaaS and CCaaS business makes sense; in retrospect, I wonder why it took so long. NEC retaining the business in Japan also makes sense as there it remains a diversified giant offering retail point-of-sale solutions, PCs, ATMs, and just about anything else connected to a network.
NEC’s focus returns to more strategic growth areas in core markets in Asia. Meanwhile, the partnership with NEC accelerated Intermedia’s global coverage, and has positioned it to grow its wholesale and direct offerings.. While NEC is walking away from mature telephony, Intermedia is running toward a high-growth opportunity. Strange times.
Dave Michels is a contributing editor and Analyst at TalkingPointz.com
More from No Jitter:
Intermedia Launches Unite for Microsoft Teams Advanced to Improve Business Efficiency -- Intermedia introduces advanced telephony features for Microsoft Teams and introduces new AI and archiving features for the contact center. (August 15, 2024)
NEC Exits Premises-based UC -- Though it exits UC, NEC’s UCaaS strategic alliance with Intermedia, which created UNIVERGE BLUE, continues. (April 19, 2024)
Reinventing Service Provider Voice -- Alianza, Intermedia, Crexendo, and Ooma are among the providers that see an installed base of service providers that are deprived of the broader applications that OTT providers include. (March 21, 2024)
Catching Up with Intermedia -- Looking to stay ahead of the competition and differentiate itself among a crowded field, cloud communications provider Intermedia has been “pedal to the metal” in building out its UC, collaboration, and contact center suites (July 12, 2021)
