Cisco, the largest networking gear manufacturer, announced that it will acquire BroadSoft, the U.S. telecommunications software firm, for approximately $1.9 billion cash.
With this, Cisco seems to have taken another step ahead in moving away from its traditional hardware business, into software and service sales. Cisco’s product portfolio includes solutions to deliver next generation collaboration experience, including meetings, calling capabilities, messaging, and contact center touchpoints. The number of Cisco’s customers moving to cloud is continuously increasing, and so is the demand for cloud deployment flexibility.
Hence, the company chose to acquire BroadSoft, which provides a wide range of cloud collaboration platforms and business applications. The move will strengthen Cisco’s cloud investments and its capability of delivering collaboration solutions to its carrier customer base across the globe.
The deal will help Cisco in high growth areas such as IoT, security and cloud computing.
“Together, Cisco and BroadSoft will deliver a robust suite of collaboration capabilities across every market segment,” said Rowan Trollope, senior vice president and general manager of Cisco’s Applications Business Group. “We believe that our combined offers, from Cisco’s collaboration technology for enterprises to BroadSoft’s suite for small and medium businesses delivered through Service Providers will give customers more choice and flexibility.”
The acquisition, approved by the board of directors of both the companies, reinforces the commitment of Cisco to Unified Communications and the companies together will offer SaaS services of cloud based unified communications and contact center software solutions for customers of all sizes.
“We are excited about this transaction, which represents the culmination of a robust process undertaken by BroadSoft’s Board of Directors to maximize shareholder value,” said Michael Tessler, president and CEO, BroadSoft. “As businesses continue to move toward the cloud in search of simplicity and speed, joining Cisco will allow us to deliver best-in-class collaboration tools and services. BroadSoft’s hosted offerings, sold through the Service Providers and aimed at small and medium businesses, are highly complementary to Cisco’s on-premises and enterprise-centric HCS offerings. Together, we can inspire teams to create, collaborate and perform in ways never before imagined.”
“Cisco recently marked a significant milestone with our 200th acquisition. Acquisitions continue to be a core part of our innovation strategy and over the past two years have helped Cisco accelerate or enter areas such as IoT, application intelligence, AI, hyperconvergence and SD-WAN,” said Rob Salvagno, vice president of Cisco Corporate Development. “With the addition of BroadSoft, we expect to accelerate the pace of innovation across our entire collaboration portfolio.”
Cisco had recently acquired SpringPath in September this year for $320 million in cash, to improve its data center portfolio. And the deal with BroadSoft is its 200th acquisition.
The BroadSoft team will join Cisco’s Unified Communications Technology Group which will be led by Tom Puorro, vice president and general manager in Applications Group. The acquisition is expected to be completed in the first quarter of 2018.