Cisco's plans to acquire telecommunications software provider BroadSoft for $1.9 billion may excite the market for cloud-based voice services, a burgeoning recurring revenue opportunity for channel partners, according to telecom master agents.
For master agent Avant, Cisco's latest purchase and unified communications provider Avaya's Chapter 11 bankruptcy filing signifies the death of the hardware-based private branch exchanges (PBX) as businesses adopt subscription-based solutions like UCaaS.
"Every single customer now understands where the market is going. For our partners, it's now about taking advantage of that cloud opportunity," said Drew Lydecker, co-founder of Chicago-based Avant.
BroadSoft is a softswitch and software provider that powers many of the telecom giants' VoIP and UCaaS offerings. Its customers include AT&T, CenturyLink and Verizon, as well as smaller service providers, such as Evolve IP and Vonage.
As such, master agent Intelisys, which has many BroadSoft-powered providers in its portfolio, has been following BroadSoft closely.
"This could have gone horribly wrong if the acquiring company wasn't committed to the channel or didn't understand service providers," said Andrew Pryfogle, senior vice president of cloud transformation for Petaluma, Calif.-based Intelisys.
Market heavyweight Cisco's purchase of a UCaaS powerhouse is similar to its acquisition of SD-WAN startup Viptela, which helped spur SD-WAN sales that weren't taking off with Cisco's iWAN offering alone. The deal is a win for partners because it will further ignite the already blossoming UCaaS market, Avant's Lydecker said.
"I believe Cisco might have understood they weren't positioned in the market appropriately," he said. "It's exciting from our perspective to have a market giant like Cisco get more into the subscription-based economy with a born-in-the-cloud company that is singularly focused on one thing."
The only challenge Cisco will have, Lydecker said, is maintaining BroadSoft's culture and focused determination on the UCaaS market.
For its part, San Jose-based Cisco has a mature service provider business and Pryfogle expects the vendor to continue to invest heavily in that business and to support service providers.