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Unified communications vendors continue consolidation carousel

Several unified communications vendors rang in the new year with mergers and acquisitions, as Star2Star merges with Blueface and Polycom picks up Obihai Technology.

Katherine Finnell
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Published: 05 Jan 2018

The first week of 2018 saw a flurry of mergers and acquisitions swirl around the unified communications industry. The different deals among the various unified communications vendors included cloud-based communications mergers and vendors adding new capabilities to their portfolios.

Hybrid cloud communications provider Star2Star and European UC-as-a-service (UCaaS) provider Blueface are set to merge in a $500 million deal. The combined company will become StarBlue and have a global workforce of over 500 employees.

The merger underscores the continued consolidation in the UCaaS market, said Irwin Lazar, an analyst with Nemertes Research, based in Mokena, Ill.

With Blueface based in Dublin, the merger should help Star2Star serve the European market, which could provide a competitive edge over smaller providers, Lazar said. However, he added, Star2Star still needs to invest in growing market awareness to more effectively compete with 8x8 Inc., Mitel, RingCentral and Vonage.

According to Gartner's UCaaS Magic Quadrant, Star2Star, based in Sarasota, Fla., is a niche player with competitive pricing and a hybrid architecture that offers high reliability over low-speed broadband networks. However, Star2Star is smaller than other providers in the market in terms of revenue, number of employees and capital structure. The company also lacks brand recognition because of its channel-only sales approach.

Blueface CEO Alan Foy will become the CEO of Star2Star and group CEO of StarBlue. Amid the merger, Foy said in a statement, daily operations will remain "business as usual." The combined company does not plan to change branding or partner and customer relationships, he said. The operating companies will keep their existing trade names in their respective markets.

Polycom to acquire VoIP service competitor

Other unified communications vendors are looking to boost their voice over IP prowess, as Polycom said it would acquire Obihai Technology Inc., a provider of VoIP software and hardware based in Campbell, Calif. The acquisition is expected to close in the first quarter.

"Obihai's product and cloud services engineering expertise will be a powerful advantage for Polycom's partners and their customers in an increasingly competitive market," said Jan Fandrianto, CEO of Obihai.

Polycom, based in San Jose, Calif., will use Obihai's services to add more cloud capabilities and analog terminal adapter services to its portfolio. The merger will also expand Polycom's market reach and access to channel partners. Lazar said the acquisition eliminates a competitor for Polycom, and the technology could improve their line-of-business phones.

"Polycom faces an increasingly competitive phone market, as competitors like Snom and Yealink gain ground," he said. Polycom's partnership with BroadSoft is also in question following Cisco's acquisition of BroadSoft in October 2017.

Calero boosts UC operations management

Communications lifecycle management software provider Calero Software, based in Rochester, N.Y., has acquired Comview Corp., a telecom expense management, call accounting and usage management software provider based in Huntington Station, N.Y. The financial terms of the deal were not disclosed.

Comview's telecom expense management services are complementary to Calero's services, said Steven Kaplan, a general partner at Riverside Partners, a private equity firm that acquired Calero in September 2017. Calero's services help organizations -- such as large enterprises, universities and government agencies -- manage their cloud communication services, devices, contracts and spending.

Lazar said companies that invest in operations management platforms will see a reduction in their total cost of operations.

"Adoption of tools is relatively low, so there's good opportunity for companies like Calero to expand and compete with vendors like Unimax and VOSS," he said.

West acquires PhoneTree for automated messaging

West Corp. acquired PhoneTree, a provider of automated appointment reminder services and patient communication software based in Winston-Salem, N.C. PhoneTree will be integrated with West's interactive services healthcare business. The terms of the deal were not disclosed.

The rise of communications platform as a service (CPaaS) has driven some unified communications vendors to enhance their messaging capabilities.

"By acquiring PhoneTree, West can offer packaged customer-facing messaging solutions that compete with CPaaS vendors that often require customers to build their own apps," Lazar said. For example, a healthcare organization looking to add text-based appointment notifications could use PhoneTree's service without having to write its own app.

West, based in Omaha, Neb., also acquired last year ECaTS, or Emergency Call Tracking System, a provider of 911 software-as-a-service network traffic monitoring and call-reporting services. Last year, West was acquired by Apollo Global Management, a private equity firm based in New York.

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