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UCaaS M&A This Week

This has been another big week in M&A in the UCaaS space. Last week we had Mitel quit UCaaS to focus on the PBX business while selling IP to RingCentral and becoming another RNG reseller.

This week the biggest news is Vonage finally selling. When the Vonage board hired Rory Read I guess they were looking for a salesman. Ericcson is buying Vonage for $6.2B in cash. Ericcson bought Cradlepoint last year. Cradlepoint is a CPE maker with 4G/5G service contracts (MVNO for data as backup). That kind of fits into ERiccson’s line of business. Apparently now Ericcson wants to get into the cloud PaaS business. Good luck!

In March (2021) Twilio, one of the largest CPaaS players, invested $750M into Syniverse. Syniverse handles wireless LNP, cellular traffic exchange and MMS gateways for cellcos globally. Twilio invested to improve their MMS traffic performance since the rules for SMS/MMS traffic were changing. Syniverse went public via a SPAC transaction in August for $2.8B. Twilio made out. Market cap today for Twilio is $50B with less than $2B in revenue. Vonage revenue is $1.2B and much of that is CPaaS. It was a steal to buy Vonage (Nexmo) for the CPaaS business to compete with Syniverse, which I think is where Ericcson is going.

I do find it funny that Jon Arnold didn’t like the Ericcson-Vonage transaction – and labeled it a risky UCaaS play when I think Ericcson did this for Nexmo. This is about Mobility – 5G + cloud comms.

Let’s not forget that Ericcson partnered with AT&T and Telarus to launch the SMB 5G-ready virtual workspace service this past May (2021). This leveraged Cradlepoint. Maybe the future of WFA (work from anywhere) is a virtual workspace that includes dial-tone, messaging, video and text. That could easily be powered by Vonage.

The one million developers that Vonage has courted into is ecosystem (I hate that word right now) were mainly playing with apps that look like Uber, Lyft or Doordash, powered by CPaaS for payment, communications and more. Now Ericcson will push these developers globally and maybe attach that to the WFA offering. Who knows? But I do not think that UCaaS was the play here. Nor CCaaS. Twilio may have jumped into CCaaS alongside Microsoft, Amazon and others but I don’t think that is the direction Ericcson is looking. I think it centers around 5G and mobility, something that Verizon has firmly embraced. (Give a listen here.) T-Mobile is trying to embrace this but Verizon has the only mobile UC offering (OneTalk).

If you stretch that out you could see Ericcson white labeling the entire stack that would allow any of the telcos or cellcos globally to create a service offering from Vonage’s stack of functionality.

Another big transaction is BCM One buying Coredial. BCM One already acquired Skyswitch, a large white label UCaaS provider leveraging the Netsapiens softswitch. Coredial was utilizing Asterisk then Broadsoft. In 2018 Coredial acquired Voice4Net for its contact center offerings. Last year, Coredial bought eZuce for video to better compete with the Big 3 Public UC players. Coredial also has a quote to bill OSS/BSS.

BCM One now has two large white label providers for UCaaS. They also have a significant managed SIP trunking business coupled with a network aggregator/reseller.

There has been much M&A in the CPaaS space. Sinch is the other large global CPaaS provider and they have been on an M&A tear in 2021 buying Inteliquent and MessageMedia.

There has been much M&A in the CPaaS space. Sinch is the other large global CPaaS provider and they have been on an M&A tear in 2021 buying Inteliquent and MessageMedia.

IQstel is acquiring Smartbiz Telecom, a provider of VoIP and SMS services.

Mobile and business messaging solutions provider Mavenir has acquired CPaaS provider, Telestax.

Source: ChannelPlaybook