Broadvox and Cypress: What Now?

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Broadvox and Cypress: What Now?

Broadvox and Cypress acknowledged the merger rumors on Thursday, announcing that they were still working out the details of the merger. (TMC broke the story here). Both companies wanted to assure customers that it will be business as usual.

Executives told TMC that no product lines were in danger. As the press release states, 'While both companies deliver a hosted VoIP and hosted unified communications solution, neither customer base is expected to be affected by the merger. Customers using Cypress' C4 IP product and those using Broadvox's GO!VBX will see no changes in their current feature sets, phones, or technology platforms. The Cypress C4 IP solution is ideally suited for enterprises, while GO!VBX primarily targets SMBs." Cypress has a Nortel C4 platform as well as a Broadsoft platform that the company utilizes for its UCaaS and CaaS strategy. Cyrpress also runs a nationwide MPLS network that I am assuming ties together all the buildings that the REIT that owns Cypress owned. Being a BLEC was how Cypress evolved. It then dabbled in the Channel, but agents have a hard time wrapping their head around a sales plan primarily of lit buildings. (Although I have a book coming out that will solve that - shameless plug!). Cypress sells direct to medium sized businesses, racking up 6500 along the way.

Meanwhile, Broadvox has been selling SIP trunking since 2007 mainly through the indirect channel. Broadvox has a wholesale arm for Origination and Termination with 300 customers, including Google Voice. Broadvox is just rolling out Hosted PBX and Web Apps, something that Cypress has been offering since 2007.

The merger works in that there isn't much overlap in service offerings; Cypress gets to take advantage of Broadvox's Channel success while Broadvox gets a direct sales force. Broadvox gets more traffic on its network too. More than doubling its 3500 customer base.

I see two main issues: It's expensive and complex to run 3 platforms (Nortel, Broadsoft and whatever Broadvox uses). Where's the roadmap for the Nortel C4 service, especially in light of the Avaya purchase? The other issue is that selling wholesale and retail to every strata has not worked well for any VoIP company. (See NTG, CommPartners, et al). There will be Channel Conflict. Also, consider that Broadvox has been selling one simple product through the Channel - SIP Trunking. (It only rolled out a Hosted Voice offering a couple of months ago). Now you are giving the channel many different products - Nortel, UCaaS, Trunking, Hosted PBX, Web Apps. That gets tricky. Hopefully, it will work out.



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