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June 29, 2023
BCM One has wrapped its acquisition of business voice solutions provider Pure IP, as widespread Microsoft Teams migration continues at the enterprise level and more MSPs adopt white-label voice services.
BCM One, a member of private equity firm Thompson Street Capital Partners’ portfolio, first announced the acquisition of Pure IP in April. The purchase of Pure IP represents BCM One’s ninth such transaction. The New York City-based provider has added companies like CoreDial and SkySwitch as part of its stated goal of establishing a deep next-generation voice services portfolio.
In this case, BCM One is tapping into Pure IP’s international footprint. The purchased company maintains offices in the United Kingdom and New Zealand. But perhaps most importantly, Pure IP has built a reputation for performing voice migrations for large customers.
BCM One’s Geoff Bloss
“Pure IP’s expertise migrating enterprise customers from PBX and UCaaS platforms to next-generation platforms including Microsoft Teams, Cisco and Zoom are a perfect complement to the BCM One portfolio,” BCM One CEO Geoff Bloss said. “The global infrastructure and flexibility to design solutions from leading providers reinforces our leadership position as a next gen communications and managed services provider.”
Thompson Street Capital Partners (TSCP) managing director Brian Kornmann said BCM One has now acquired two companies while belonging to Thompson Street’s “Continuation Fund.”
TSCP’s Brian Kornmann
The private equity firm announced the Continuation Fund in December 2021. Private equity asset manager AlpInvest and other investors helped fund the program. According to Thompson Street, the Continuation Fund allows for the purchase of Revenue Management Solutions and BCM One. Their combined enterprise value stood at approximately $1.2 billion at the time, according to the announcement.
“A key strategy for BCM One, from our initial partnership in 2019, was to grow the business internationally and to expand our services to include enterprise customers,” Kornmann said. “Our investment in Pure IP achieves both while further strengthening BCM One’s service offering with key partners including Zoom, Microsoft and Cisco. BCM One continues to explore opportunities which provide for inorganic scale and growth through key product, customer, and geographical growth.”
BCM One chief revenue officer Mike Nowak told Channel Futures in a recent interview that the transition has gone smoothly for bringing together BCM One and Pure IP.
BCM One’s Mike Nowak
“They didn’t make a lot of odd one-off products or things that didn’t scale. So we’re pleasantly reassured of our assumptions that it’s a solid company. Going forward, we don’t have a lot of cleanup or product issues that we have to contend with,” Nowak said.
It’s no industry secret that Microsoft Teams looms large before partners who sell voice and UCaaS solutions. The collaboration solution has been steadily gaining market share momentum. The widely used platform is putting pressure both on UCaaS providers as well as on-premises PBX providers.
Nowak said enterprise and midmarket customers in particular are looking to migrate to Microsoft Teams, and in some cases Cisco Webex. And Nowak said Pure IP’s identity completely fit those migrations.
And what do those migrations look like? Nowak said many businesses on the enterprise and midmarket side are starting with on-premised solutions like Cisco Unified Call Manager and Avaya. While some enterprises have deployed UCaaS, many of them have stayed on-premises.
Nowak said he has observed Cisco working hard to bring its on-prem Call Manager customers into Webex Calling. Nowak said sometimes those efforts succeed, but customers are “overwhelmingly” moving to Teams.
But that movement does not always …
… occur all at once. Enterprise and midmarket customers tend to make a gradual transition to Teams.
“You don’t see a complete hot cut. You don’t take a Fortune 500 company and hot cut it over to Teams overnight. You might want to turn on your United States office, but you leave the U.K. office or South Africa office separate until you’re ready to get them assimilated. You’re probably going to do a few of the offices on a rollout schedule.”
Small business, on the other hand, tells a different story.
“We see not as much movement to Teams. Some interest but not as much movement. Especially in the 25-seat and under range, we still see a lot of UCaaS sales and still SIP trunking sales,” Nowak told Channel Futures. “SIP trunking sales are very consistent. I don’t know if they’re necessarily buying new phone systems, but they use products like 3CX that are virtualized systems.”
UCaaS exploded in popularity in the initial months of the COVID-19 pandemic. A study from Avant found an 86% increase in customer interest early on. Three years later, many of those customers are reaching the end of their contracts. And they’re feeling the regret of a hasty decision.
“People made stressed mistakes. When you’re stressed, you don’t always have a checklist. People engaged platforms because it was easy to get video calls. But they didn’t think of how it impacted call flows or software integrations or how it connects to a contact center right. They made rushed decisions and panicked in that process,” Nowak said.
BCM One goes to market through a variety of partners.
On one hand, the provider goes to market with technology services distributors (TSDs). Nowak pointed to the trend of consolidation that has occurred among some of these TSDs. Those deals include Avant purchasing PlanetOne, Telarus buying TCG and other companies, as well as AppDirect and Bridgepointe making acquisitions. He said he hopes the activities associated with bringing business elements are coming to a close.
“I hope we’re past a lot of the heavy lifting… I think you’re going have four, five, six major [TSDs]. I think the businesses are probably going to not be too difficult to operate, so I don’t I don’t see any fallout,” he said.
He added that selling partners who work with the TSDs will ultimately “vote with their dollars” on where they see value. But they don’t seem stressed, Nowak said.
“I think they kind of navigated it. Folks seem to believe in the model. We believe in the model. It works, and we support it,” he told Channel Futures.
He noted that BCM One’s white-label business — bolstered by its acquisitions of CoreDial and Sky Switch — is currently a “top performer” when it comes to channel growth. And the vendor’s channel strategy has shifted to a more selective posture since the early era of the white label program.
“Our model the initial days of the fast growth period was, anyone that wants to show up can be a partner,” he said. “We changed that quickly. We said, ‘This is a serious program, and it’s not for everybody. We’re welcoming, but we want to steer you to the right path.’ We do a very intensive engagement to make sure they’re onboarded correctly, and they know how to file their taxes. It’s an investment kit.”
The partners engaging with the white label program include MSPs who want to do voice for the first time, resellers that might have sold Mitel or Avaya in the past, and even agents who want to tackle more of the technical side of things.
“The interest level is very high,” Nowak said.
BCM One last announced the hire of Andrew Ramos as senior director of global sales.
BCM One’s Andrew Ramos
He had been working at OneStream as vice president of global channel sales, which CallTower bought last year. He helped oversee the combined company’s channel sales and distribution programs. He also previously worked for Masergy, focusing on Cisco and “key system integrators.”
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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