Vonage Picks Up Another One

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

Vonage Picks Up Another One

Broadsoft is losing customers steadily. Vonage bought its third Broadsoft shop today with the announcement it is acquiring iCore for $92M. "The purchase price represents approximately 1.3 times estimated 2015 iCore revenues." [pr]

"iCore sells its solutions primarily through its large, direct field sales force, adding significant scale and a national footprint to Vonage's existing sales force. iCore supports more than 85,000 customer seats, with monthly ARPU per customer of more than $4,000, and derives more than 60% of its revenue from customers with 100 or more seats. Monthly revenue churn is less than one percent as a result of three-year contracts that include Quality of Service ("QoS") guarantees." Doesn't that mean that they have about 1000 accounts? And 3-year contracts are normal. In fact, C-Link gets 5 year contracts.

iCore mainly runs BroadWorks but some customers are still on the old M6 platform. Ah, that mess that so many BSFT customers face, of running two platforms, of no upgrade path.

Vonage gets to branch out a little here since iCore also offered "cloud services, such as Infrastructure as a Service (IaaS), virtual desktop, and hosted Microsoft Exchange"...and Microsoft Lync-as-a-Service solution.

I though the VoIP consolidation would be going faster, but I guess it takes time for founders and investors to realize that you didn't win the lottery, you are just going to get 1.3x return.

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