ShoreTel just announced they are purchasing M5 Networks - both companies have been past participants in ITEXPO - I happen to be here at ITEXPO Miami where we have record crowds. And cloud communications is a hot space as evidenced by the interest in the technology by purchasing conferees here at the show.
And this is the reason for the acquisition. Many will credit the simplicity of ShoreTel PBXs as well as their "networking" based approach to design and deployment for some of their success. Obviously they are better at marketing and PR than most communications
companies as well.
But the future is the cloud and M5 has been a regional player for a long time and although they have expanded their footprint they don't have a strong enough brand to be the cloud-communications alternative to a strong brand like Cisco or Avaya. Now with
ShoreTel behind them they have the money and the marketing expertise to be a serious player.
The biggest hit will likely be felt by 8x8 as they are a pure-play cloud communications company who has been getting a lot of investor love lately due to their great earnings announcements.
Cisco may now be forced to buy 8x8 and Avaya will likely make a move as well. This move could even push Vonage to go after the SMB space. Mitel is an interesting question - they have leading edge tech but a troubled stock to use as currency.
One thing is for sure - it will be an interesting time for M&A this year in cloud communications. And if companies don't act fast they may not get a chance to compete in the cloud because the cable companies are
not sitting still.