Channel Partners Hope for Value in 8×8’s ‘Fire Sale’ Fuze Acquisition

8×8’s pending acquisition of Fuze will help the UCaaS provider cement itself as an alternative to rivals Microsoft, Zoom and RingCentral.

8×8 on Wednesday announced the $250 million acquisition of Fuze. The stock and cash transaction will reportedly bolster 8×8’s XCaaS platform and give it more enterprise customers. Fuze on the other hand will retire as much as $130.2 million in debt and pay off non-accredited stockholders.

Jon Arnold of J Arnold and Associates studies the unified communications market. He said 8×8’s move plays well with what its larger rival, RingCentral, is doing in the market. Most recently, RingCentral announced that it was paying $650 million to “partner” with Mitel. In 2019 RingCentral paid $500 million to partner with Avaya. In both cases RingCentral acquired a massive customer base that it could harness for upselling opportunities, specifically in cloud migration.

J Arnold & Associates’ Jon Arnold

But Arnold said some customers, particularly on the Mitel end, have expressed unhappiness over the news that their Mitel systems will be coming to an end.

“There’s always risk with these partnerships. You’re going to pick up some ground, but you’re also going to lose some ground. You’re always going to alienate some channel or some end buyers who don’t like your brand and deliberately went to the other guy,” Arnold told Channel Futures.

With some of those customers and their partners looking for an alternative vendor and uncertainty looming over what Ericsson will do with its $6.2 billion Vonage acquisition, 8×8 could provide the alternative they’re pursuing.

“This is an opportunity for 8×8 to certainly make a clear signal to the market that they’re in. They’re staying in the game. Because you could look around and say ‘Jeez, Vonage is out now. Ring – no one catches them. Maybe I should just throw in the towel.’ But no. 8×8 is still a very viable player, and it shows the market that they’re keeping pace, and they’re charting their own course. In that way, it’s a very strong, very foundational move,” Arnold said.

Arnold also said Fuze brings vertical-specific expertise, particularly in retail.

We asked a variety of partners and analysts for their thoughts on the acquisition. See our slideshow above for their insightful commentary.