What are the main types of industry acquisitions in the UCC market?

Unified communications and collaboration industry acquisitions can be friendly or hostile, and they can be made for defensive or offensive purposes. The deal could be a one-off, where the acquiring company is filling gaps in its portfolio. Or, it can be part of an ongoing roll-up or a UCC market consolidation play. Some deals are done to take a public company private and others to take a private company public.

Long-term objectives are often involved when one vendor is trying to acquire another. These can include trying to acquire market share in the UCC market quickly to keep pace with bigger vendors and making itself a more difficult target for other competitors to take out. With so much market power controlled by the top two or three UC vendors, this strategy makes sense for tier-two vendors that want to stay in the game. In this context, such a move can be as much a strategic partnership as an outright acquisition.

In cases where a larger UC vendor is acquiring another smaller UC vendor, it's likely the offering you're using now will not survive. Worst case, the offering will be dropped or absorbed into an existing product from the acquiring vendor. You may encounter integration issues on your end, and it could result in the need to look for a new vendor.

Best-case scenario is the acquiring vendor uses the acquisition to create a richer offering that's highly complementary to what you're using, resulting in an enhanced UC product.

Acquisitions from the financial community, such as a venture capital or private equity firm, are more likely to be about buying cash flow to prop up a weaker player, rolling up smaller players into one larger player or for an outsider to buy its way into the UCC industry. These moves carry more risk and end up being more investor-driven than partner-driven. The net result is a shorter time horizon, where success is measured by the speed and size of ROI, rather than market share or the long-term roadmap.

In cases of investor acquisitions, it is important to assess how well the investor understands the UC market, as well as how to support enterprise customers. If they're outsiders simply looking for a quick turnaround, you should be wary, especially if they start cutting corners right away. Conversely, they may be hands-off operators who are genuinely committed to helping your UC vendor stay in the game and grow, in which case they will provide much needed resources to take the UC vendor -- and you -- to the next level.

UC vendors looking to exit the market through an acquisition must carefully evaluate their options. Their objectives must be carefully thought through, not just for themselves, but for their enterprise customers and partners.

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