The Death Rattle Of On-Premise Telecom

Death of prem

For the past three days, every analyst, pundit, and blogger has been putting their own spin on Cisco’s acquisition of BroadSoft.

It’s about Consolidation

Some are saying that the biggest impact will be fewer available customers due to consolidation.  Others say there will be new opportunity, because many companies (particularly enterprises) have gone to BroadSoft because they did not want to use Cisco or Microsoft.

It’s about Cisco Spark  

Art Schoeller, vice president and principal analyst at Forrester Research has another take. He believes this is all about getting traction for Cisco Spark. “It’s as if the train had already left the station [for Cisco]. Nine times out of ten, BroadSoft was what I call the ‘weapons merchant,’ the white-label solution for many Tier 1 carriers … it’s cloud, multi-tenant, and BroadSoft has already worked through the economic model of working with a partner ecosystem that’s driving subscription solutions, not premise[s] solutions. So, Cisco is trying to get traction in the market for its multi-tenant solution, i.e. Spark and the future of Spark … the channel says, ‘I’ve already got one, BroadSoft.’”

It’s about Buying Access To Telcos

Rob Salvagno, head of Cisco’s M&A and venture investment team, wrote that Cisco chose BroadSoft not only for its portfolio of cloud collaboration platforms and business applications – assets Cisco already holds – but for BroadSoft’s partnerships with more than 450 telecom carriers in 80 countries, including 25 of the top 30 globally, and some 19 million BroadSoft business subscribers. This is simply Cisco’s way of getting a stronger foothold in selling products to big telecos.

It’s about Buying Talent

Lorna Garey at Channel Partners writes, “Scooping up BroadSoft also demonstrates that there’s a shortage of IT talent — and Cisco is recognizing it.”

It’s about the End of the On-Prem World

For those of us in the trenches selling UCaaS, I’ll go with this statement from Drew Lydeck, co-founder and president of Avant Communications, “This is the biggest validation that we’ve seen that the on-prem world is officially over. Cisco’s acquisition of BroadSoft is also a validation that everything is moving to a software-defined, subscription-based economy.”  This is particularly true when you consider that BroadSoft can be used to displace the premise-based Cisco Call Manager.

You can see from our last blog post that the UCassS market is still growing. There are still plenty of customers, both SMB and Enterprise, whose next phone system will be cloud-based.  They will want to buy the service from a provider that can give them the customized service and support that only a local reseller can give them.