Last month, Cisco upstaged BroadSoft’s annual Connections conference with news that the two companies agreed to be one. Acquisitions and mergers are complicated matters that take months to resolve.
Because sometimes these deals don’t actually close (such as Mitel-Polycom), this pre-close period is handled with kid gloves. Neither BroadSoft nor Cisco will say much more than what was previously announced. There won’t be much more information even when the transaction closes (expected in Q1-2018), because that’s when the broader teams begin to address things like portfolio rationalization.
In other words, if you are hungry for details don’t hold your breath. At least for official information, but fear not. I’ve got lots of answers. Of course, they are just my opinions which have been known to differ from reality. I’m just a guy with a keyboard that’s happened to compile responses to the frequently asked questions (FAQ) I’ve received.
Please consider this an UnAuthorized FAQ. That’s not the same as fiction. I believe the answers below are pretty reasonable as someone who watches both companies pretty closely.
Will Cisco Kill BroadWorks?
The most popular question, and its demise has been exaggerated since the birth of BroadCloud.
No. Cisco views UCaaS as a means to sell Spark, so it won’t impede UCaaS sales. It had already planned to let providers sell PSTN services with Spark (Spark PMP). Now it will let them sell the full UCaaS seats powered by either BroadWorks or BroadCloud. Like BroadSoft, it will favor BroadCloud and make it attractive with frequent upgrades.
Another reason why BroadWorks is safe is because of services such as Verizon’s One-Talk. This hybrid wired-wireless approach is a compelling solution that’s spreading with providers around the globe.
The big change to providers will be incentives and pressure to attach Cisco Spark to UCaaS subscriptions. Cisco sees UCaaS as a gateway to Spark.
UCaaS as a Gateway to Spark?
Well, actually it’s “calling” or enterprise voice that’s the gateway. The way that Microsoft and Cisco (and several other UC/UCaaS savvy) intend to beat Slack at its own game is by doing what Slack can’t – unify more conversations (but don’t call it UC). That’s async (messaging) and real-time (voice and video) conversations. There’s few barriers to delivering a messaging service or even basic video, but enterprise voice is a helluva hurdle to clear.
With BroadSoft, Cisco now has three calling strategies for Spark. Premises-based solutions that integrate with Spark services, HCS (carrier hosted UC) that integrates with Spark, and now a scalable, multi-tenant, hosted option from BroadSoft (that will integrate with Spark). All three are important, and I would not be surprised if Cisco creates a flexible licensing model for migration between these options (Spark Flex 2.0).
What About Cisco’s Spark Calling?
Spark Calling was in overtime and BroadSoft ended the game. A big chunk of the team was actually let go before the BroadSoft acquisition was even announced. Like so many companies before it, Cisco underestimated the cost and complexity of developing a UCaaS platform. BroadSoft’s technologies will become the UCaaS component that powers Spark (though it might be called Spark Calling).
Will Cisco Make BroadSoft’s Solutions Proprietary to Cisco Phones?
However, Cisco does sell compatible phones, and has exhibited them at BroadSoft Connections for years. There will likely be volume and technical incentives that encourage the sale of Cisco branded endpoints into new opportunities. Mitel, for example, supports SIP endpoints, but offers advanced functionality on their own Mitel branded endpoints via its MiNet protocol.
Polycom makes a good, pioneering phone. But there’s no way it will be the de-facto standard for Microsoft, pure-SIP, and Cisco. Something’s gotta give.
How Long Will Mike and Scott Last at Cisco?
I expect them to be there a maximum of about two years. I feel they they have a sense of obligation and genuine desire for this merger to be successful. It is very likely that Cisco will provide them some compelling incentives to stick around for about two years. Keep in mind they have been at this for more than twenty years, so no one should begrudge them for exiting whenever they do.
Why Does Mike Tessler (and BroadSoft) report to Tom Puorro instead of Rowan Trollope?
Tom Puorro is the Vice President and General Manager of Unified Communications Technology Group. Mike reports to Tom, and Tom reports to Rowan. Cisco heavily practices matrix management, so Mike is also a part of Rowan’s leadership team.
Although Rowan was hired to head the Collaboration unit, his role expanded. With the acquisition of Jasper, he gained responsibility for IoT. With the acquisition of App Dynamics, his role expanded to Applications.
Will Team-One Survive at Cisco?
No. Team-One is BroadSoft’s solution for workstream collaboration. BroadSoft acquired Intellinote in 2016, and has since relaunched and improved the service. It directly overlaps with Cisco Spark (but can teach Spark a few tricks).
If there are technical compatibilities, then I expect the Team-One team to be retained. The improvements that BroadSoft implemented are impressive, and the team also has experience integrating a messaging app with BroadSoft’s APIs.
What Becomes of CC-One (Transera) at Cisco?
Transera just may be the sleeper hit in this deal. It’s easy to overlook it as it really hasn’t built momentum yet in the increasingly competitive contact center market. BroadSoft acquired Transera in 2016.
The recent Gartner MQ for contact center services placed CC-One at the bottom right – meaning strong vision with a poor ability to execute. This suggests that if Cisco fixes execution of CC-One, it just might have a visionary product on its hands.
That’s a good thing because Cisco doesn’t have a visionary contact center as a service solution. Last year, Cisco launched Spark Care, but it’s very limited. Oddly, only a few UCaaS providers have a tightly coupled contact center stack that the provider also controls. Transera is an API based contact center, so it could complement all of Cisco’s UC solutions and/or Spark itself.
After the Acquisition, What’s Safe and At-Risk?
The obvious staff at risk at BroadSoft are those associated with corporate overhead services such as finance, IT, purchasing, HR, legal, corp comms, etc.
Portfolio rationalization is complex. Cisco is very strong in video, so Meet and My-Room may see big changes. Team-One was discussed separately above. UC-One and Hub are powerful solutions that may survive on their own or be integrated into Spark. Cisco might make Spark the sole soft client.
Cisco should value BroadSoft expertise in service providers, IMS, mobility, third-party integrations, and sales expertise in small business and government.
On the other hand, I might be nervous if I was working on HCS.
Cisco’s premises-based UC solutions continue to sell well, but larger enterprises are adopting cloud services and I don’t see that changing. Cisco is unlikely to intentionally disrupt opportunities within its other revenue sreams, but there is a shift to cloud occuring.
What Becomes of the BroadSoft Brand and Powered by BroadSoft?
I will remember them fondly.
Will Cisco be Successful with the BroadSoft Acquisition?
BroadSoft marks the sixth and largest acquisition intended to strengthen Spark (Tropo, Acano, Synata, Heroik Labs, and MindMeld). This acquisition is not a pivot or curiosity, it’s about making Spark successful.
From a tech perspective, there’s not much risk. BroadSoft’s UCaaS solutions are proven and have rich APIs that appear compatible with Cisco’s vision. The risk here lies more in go-to-market. Cisco’s and BroadSoft’s channels have historically competed over sales and account control. Cisco has the daunting task of mitigating channel conflict and harnessing the power of these channels.
If this acquisition, integration, or GTM fails, so will Spark.
Will Cisco Keep the BroadSoft Connections Event?
Maybe, but not for long and it will change.
BroadSoft Connections is an unusual event. It brings together a lucrative and valuable audience of service providers from around the globe. It will likely eventually consolidate into Cisco’s mostly annual Collaboration Summit (last one was in 2015), The problem is that event is currently centered around integrators and resellers, so separate events might be more appropriate at first.
Each event is actually large enough to continue on its own, but I’m less confident that the Connections Expo hall will remain as vibrant. With less sponsors, the event will lose part of its appeal.