M&A This Week

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

M&A This Week

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IBM jumped into MDM (mobile device management) with its purchase of Fiberlink. "Fiberlink's MaaS360 cloud-based offerings, IBM will expand its bring your own device (BYOD) capabilities to deliver a complete mobile management and security solution through IBM MobileFirst that includes trusted transactions and security intelligence capabilities for mobile apps, users, content and data." [source] Fiberlink was the first MDM firm to support Google Glass.

8x8 is really branching out. First with Softbank in Japan in cloud and now buying a UK service provider. 8×8 has announced a definitive agreement to buy the UK's Voicenet Solutions. This expansion into Europe will cost them "$18.4M in cash to buy Voicenet. That will bring them 1000 business customers." Talk about the total cost of customer acquisition.

I would like to think this 8x8 deal coupled with the Vonage-Vocalocity deal meant that VoIP consolidation was going to heat up, but I don't. Too many VoIP businesses over-value themselves, so consolidation just won't happen. However, in 3 years, many of the current VoIP players will be gone - through a fire sale (like SunRocket), a bankruptcy, or some other event that will look like a merger but could be a shotgun wedding.

The weird one is MITEL merging with Aastra. The Ottawa Senator headline says enough: $392M Aastra deal gives Mitel heft, but growth remains elusive. How do you take two companies that are flaying around in the marketplace and hope together they can find direction?

Avaya announced that it has sold 360K IP Office systems; Avaya has now sold more IP Office than its ever sold BCM. Aastra has a hold in Europe that they can't seem to find in the US. The combined company will have $1B in revenue and a $100M cloud business - but so what? How much is Blackberry worth ($3.35B and $4B in rev), doesn't that tell you something?

"The business communications market is ripe for consolidation and on the cusp of a mass migration to cloud-based services. We believe that small competitors with narrow focus and limited global reach will quickly be marginalized," said Mitel President and CEO, Mr. McBee. While true, merging for the sake of growing your size isn't the answer long-term.

Premise PBX, a hosted version of same, handsets, UC, Asterisk based PBX, more phones - how does this all come together to be a growth company?

Focus and Identity are ingredients to success. It will be a year before we find out if this merger results in that.

Another merger has MSO WOW acquiring "the Columbus, OH data center, cloud, and fiber assets of cloud service provider Bluemile." WOW joins the likes of TWC as a cableco who bought a data center business.

That's the M&A wrap up this week.



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