Vonage Holdings Corp. (NYSE :VG ) has entered into an agreement to acquire privately-held NewVoiceMedia, an industry-leading cloud Contact Center-as-a-Service (CCaaS) provider, for an equity price of $350 million paid in cash. NewVoiceMedia is the largest privately-owned, pure-play, cloud contact center company globally, and is a recognized leader in the space. NewVoiceMedia is in the Leader’s quadrant of the Gartner CCaaS Magic Quadrant for Western Europe.
- NewVoiceMedia was included in the Innovation Showcase at Enterprise Connect earlier year. The theme was speech technologies, and NVM had some clever voice technologies.
- At $350M, it’s a 3.8x valuation. A bit low for cloud/recurring revenue plays.
- NewVoiceMedia is a contact center company for Salesforce customers. They are not that well known outside the Salesforce realm. It’s no secret that the contact center and the CRM are moving closer together. It’s what I call Big (Customer) Data – the contact center and the CRM both want to leverage Big (Customer) Data in increasingly similar ways. There’s two ways to do this: Either build a single-stop app that does it all, or focus on tight integrations. NVM is so tightly integrated that it’s not that useful alone.
- It’s likely a disappointment for NewVoiceMedia. I assumed the company existed to be acquired by Salesforce. I guess they decided that wasn’t in the cards. There’s a tremendous amount of customer knowledge inside of Salesforce. NVM’s dependence on Salesforce is both limiting and dangerous. I expect Salesforce will eventually get into the contact center space directly.
- This will finally (likely) put Vonage in a Gartner Magic Quadrant (CCaaS W Europe). Gartner doesn’t do one for CPaaS (Nexmo) and won’t include the $3.2B public company in its UCaaS MQ because it’s not global enough.
- Cloud providers that own their own tech have brighter futures and valuations than those built on licensed software. With VBC, TokBox acquisition, Nexmo acquisition, and launch of VonageFlow, the company is betting on SaaS over selling seats powered by someone else’s tech. However, becoming a SaaS in CC is not a trivial undertaking. Most independent CC providers have already been swallowed: Genesys bought ININ, NICE bought inContact, Mitel bought PrairieFyre, BroadSoft (now Cisco) bought Transera, ShoreTel (now Mitel) acquired Corvisa, and I’m sure there’s others.
- The Vonage CC suite is becoming very broad. Vonage has a reseller arrangement with NICE (inContact and CXOne). They also have an open source routing engine for Nexmo for the DIY crowd. Now they have the source code for NVM.
- Vonage is also pretty strong on integrations (such as Salesforce). The company acquired gUnify several years back which has blossomed into its master integration framework.
- Vonage is one of the fastest moving providers in the UCaaS space. VBC is the newest built-for-cloud UCaaS (multi-tenant, microservices, built on AWS). it launched a workstream solution (VonageFlow) earlier this year, and NVM marks its second acquisition in the past few months.
- It’s surprising for a few reasons. First, Vonage just announced its acquisition of Tokbox (acquisitions take a lot of effort). Secondly, NVM is UK based (it’s a cookie vs. scone thing), and lastly because NVM is so dependent on Salesforce.
Vonage is becoming a SaaS and IP powerhouse. They own (not resell) the core technologies that power its UCaaS, CPaaS, video, and CC services. Key to their thinking is that the sum is greater than the parts (CEO Masarek speaks about this often). Nexmo, for example, can be used independently to strengthen (or create) applications or to expand/customize the Vonage applications.
This is Vonage 3.0. Vonage 1.0 was a consumer VoIP pioneer known for incessant television advertising. Vonage 2.0 was the BroadSoft aggregator (acquired Telesphere, SimpleSignal, and iCore), and Vonage 3.0 started soon after CEO Alan Masarek arrived in 2014.