Cisco Adds Another Piece to its Enterprise IT Puzzle

Broadsoft scooped by Cisco, does it make sense?

Cisco is known for being a one stop shop for enterprise IT. Once Cisco gets passed the enterprise doorstep, it is hard for other companies to come in with just one piece of the enterprise IT puzzle. That’s also the reason why companies find it hard to partner with Cisco, when doing that there are basically 3 options for the future of that partnership down the road:

• The partnership will fail, just a gap filler until they have their own offering
• Cisco will buy the partner
• Cisco will buy a competitor of the partner and the partner will be left to bleed

Second place is not an option

Being second place is not an option for Cisco. In strategic areas within enterprise IT where existing Cisco solutions (home grown or through past acquisitions) are not performing well enough compared to competition, Cisco will write a big check to fill in the gap.

The reason for that is not the risk of losing deals in that specific technology segment but rather the risk of allowing another vendor passed the enterprise IT door.

For SD-WAN, earlier this year Cisco acquired Viptela although Cisco already had its IWAN solution for this technology segment. IWAN wasn’t a winning product in the market compared to other solution and instead of commencing an uphill battle, Cisco made the right decision for a company in its size, not to risk networking related business and acquire a good solution with strong market presence.

Broadsoft scooped by Cisco

In the case of Unified Communications (UC), the situation is different, at least at a high-level view.

Cisco has its long time Unified Communications Manager and has went through several acquisitions in this space including Tandberg for video in 2009, Tropo for cloud API in 2015 and in 2016 it acquired Acano again for video but this time to better position itself in the cloud.

Cisco is positioned well in the UC market. Gartner positions Cisco as a Leader in its 2017 Magic Quadrant for Unified Communications.

If all is so great, what made Cisco write a check for $1.9 billion to acquire Broadsoft?

The caveat in this Magic Quadrant is that it is for on-premises deployments.

And the future of UC is not there. It’s in the cloud. Actually, not even in UC as we know it today.

Cisco has a mixed and overlapping offering in the UC space, something Gartner relates to as a “Caution” in the Gartner Magic Quadrant Strengths and Cautions section.

With all the acquisitions Cisco has done in this space Broadsoft brings Cisco a few strong points that will help Cisco to better position itself in the rapidly changing UC and team collaboration market with threats coming from companies such as Microsoft and Slack.

• Cloud – Broadsoft is the company behind most of the service provider hosted UC services. Service providers use BroadWorks for offering the service off of their own networks and data centers
• Even more cloud – In the last several years Broadsoft has put a lot of emphasis on its hosted solution, BroadCloud, that allows service providers to quickly launch UC services under their brand using the Broadsoft hosted solution
• Service provider market – Cisco is first and foremost an enterprise solution provider. Broadsoft has in its portfolio 25 out of the top 30 service providers by revenue (that’s what they say). By acquiring Broadsoft, Cisco taps into this market
• A stronger foot in next generation UC – Cisco already has a foot in collaboration and messaging. Broadsoft has their Team-One for… team collaboration, already built into its offering.

Closing thoughts

Although Cisco has a very strong position in the UC market, its strengths are mainly in UC of the past (on-premises deployments and telephony focused).

The acquisition of Broadsoft will help Cisco to better compete in the next generation cloud UC and team collaboration.

Overall a strong move of Cisco to help it compete with its rivals such as Microsoft and Slack.

 

 

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