Smoothstone Gets Bought

April 20, 2011

Consolidation continues in the Hosted VoIP space as West Corporation, which owns Intercall, Intrado and other businesses, acquired Smoothstone today for $120M. This is on the heels of InterCall, a subsidiary of West Corporation and the world's largest conferencing and collaboration services provider, acquiring Preferred One Stop Technologies Limited ("POSTcti"), a leading provider of components, systems, professional services and hosted services for Unified Communications ("UC") in Europe on February 1st. [POSTcti provides Unifiied Desktop primarily].

This certainly helps West to become a big player in the Hosted UC space globally. SmoothStone expanded into Europe back in November (on the MPLS network of Masergy). SmoothStone, based in Louisville, KY, partnered with Sprint for fixed-mobile convergence and to extend the delivery of its Virtual PBX and Unified Communications services.

Intercall might gain some momentum as the conferencing arm for SmoothStone's cloud communications services.

As the giants like Cox, Comcast and XO begin to roll out Hosted PBX and versions of UC2 (unified collaboration and communications), consolidation is a must. Many of the cloud comm providers do not have the money, sales force, scale or network to compete head-to-head with the likes of Comcast.

Before this deal - valued at $120M - the largest Hosted VoIP deal I can recall was M5 buying Gekkotech to create a $40M player in NYC. With estimates that the VoIP services global market is nearing $50B already, there will need to be more consolidation to make a dent. Granted most of that $50M is SIP origination and termination that one day not too long ago was TDM - and that some of that is Skype, Vonage and MagicJack. But when you break it down to Hosted PBX, Packet8 is a $65M company -- so SmoothStone was a giant in this side of the sector.

Smoothstone Gets Bought

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Smoothstone Gets Bought