https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Technologies


Cisco Systems Logo

Cisco Continues its Hardware-to-Services Pivot with BroadSoft Acquisition

  • Written by Kris Blackmon
  • October 27, 2017
Cisco buys BroadSoft in the latest of a hot streak of acquisitions in its hard pivot toward software and services.

Fresh off its announcement last week that it acquired machine learning startup Perspica, Cisco this week revealed its intentions to bring UCaaS provider BroadSoft into its fold. The move, the latest in a long string of acquisitions this year, is part of Cisco’s strategy to quickly pivot from its traditional hardware sales to cloud-based services by buying them rather than developing them.

The deal carried a $55-a-share cash offer, or about $1.9B in cash, and is expected to close in the first quarter of 2018.

BroadSoft offers cloud-based unified communications solutions such as voice, video, messaging, file sharing, and conferencing and should fit in nicely with Cisco’s Hosted Collaboration Solutions services. The move gives Cisco a solid foothold into the UCaaS market, which has eluded the telco giant until now, Jason Noah Ader, an analyst at William Blair & Co. told Bloomberg earlier this week.

Cisco is doubling down on its investments in software and services, a pivot that mirrors the transition that many traditional resellers and MSPs are also executing. Its services division is the second largest business in the Cisco organization; Bryan Palma, senior vice president and general manager of the Cisco Advanced Services Group, told The VAR Guy just last week that its near-term goal is to drive half of its revenue through that business.

Palma says that traditional reseller partners looking to make the switch to a services-based model can leverage Cisco’s programs to generate a recurring revenue stream while still making money from hardware resale. But it’s clear that ongoing services is what the company sees as its dominant future market.

It isn’t hard to understand why. Cisco’s quarterly revenue numbers speak for themselves. According to Martin Wolf, CEO of IT M&A Advisory martinwolf, while Cisco’s latest quarterly results show an overall decline of four percent year-over-year, the revenue generated by its software and subscriptions business increased by 50 percent.

It’s a big shift in a relatively short time period, especially when compared to some of the stumbles other tech giants like Hewlett Packard Enterprise have made as they try to find their identity in a cloud-based market. As recently as five years ago, Cisco was viewed as a highly proprietary, commoditized hardware company. Palma says the shift toward services is different from the other tech waves its had to navigate in the past.

“We’ve managed a lot of technology transitions, whether IP or ecommerce or video. This is much more of a business model transition,” said Palma. “While software and services is becoming more important, that vertical expertise and business knowledge is also becoming more important—and becoming a big opportunity for our partners.”

Many providers have built their recurring revenue businesses on offering UCaaS solutions, which can be an easy segue from an up-front sales model since from a technical perspective, managing on-prem PBX solutions isn’t all that different from managing the cloud-based version.

This may cause some consternation among Cisco channel partners that have invested heavily in developing their own UCaaS offerings that directly compete with those of BroadSoft. Details on how Cisco will help partners manage that conflict have been scarce, but its expected that the company will address this, at least on a high level, at its annual Cisco Partner Summit next week.

“They’ve got a delicate balance here. But I also think this is the writing on the wall. There are a lot of people that have gone out and built hosted PBX solutions utilizing Cisco and have competed against BroadSoft, but I don’t think anyone is having an amazing amount of success, or Cisco wouldn’t have gone down this path,” says Drew Lydecker, co-founder of master agent and distributor Avant. “But they bought a company that is the engine for high service providers that has a proven track record. That really lends itself to what Cisco does.”

For now, Cisco is sticking to generalities when directly addressing the impact the acquisition will have on its partners.

“With the Broadsoft acquisition, we are continuing to accelerate and broaden our portfolio by bringing more flexibility to our partners in terms of delivering on prem and cloud-managed collaboration solutions,” Nirav Sheth, VP of solutions, engineering and architectures for Cisco’s Global Partner Organization, told The VAR Guy. “Broadsoft is an industry leader for cloud managed calling & contact center, and enables our partners to unlock new TAM by providing more in the way of ‘As A Service’ cloud managed options for the mid-market and SMB customer community.”

“I believe this is an amazing opportunity for everybody that is a trusted advisor,” concludes Lydecker. “This is absolutely the golden era. This was literally the shot off the bow that says it’s time to get into this game.”

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Digital Transformation Strategy Technologies

Related


  • Multi-Cloud VMware
    Multi-Cloud: Strategy or Inevitable Outcome? (or both?)
    VMware’s approach to multi-cloud can help at any stage--wherever your business is at any given moment.
  • Security Merger
    Thycotic-Centrify Merger Poses Potential Threat to PAM Leader CyberArk
    PAM technology is more relevant than ever with widespread remote work.
  • Social Engineering
    How Are Your Clients Handling Social Engineering? Chances Are, Not Well
    New research from MSP Electric shows where COVID-19-fueled threats are especially problematic.
  • Partner program gears
    Pluribus Networks Launches Expanded, Simplified Partner Program
    The expanded program shifts from four to two tiers to simplify engagement.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • IBM Names 2 Senior Execs for NewCo Spinoff
  • Full-Stack ICT Supply Chain Ownership Becoming a Thing of the Past
  • Microsoft Integrates Dynamics 365 and Teams, Reveals New Features
  • Channel Partners Virtual Wraps — See You In Person at CP Expo Homecoming

Galleries

View all

From The Second City: How to Use Improv as a Business Tool

March 3, 2021

Industry Perspectives

View all

5 Ways XDR Can Improve Operational Efficiency for MSPs

March 4, 2021

Multi-Cloud: Strategy or Inevitable Outcome? (or both?)

March 3, 2021

Backup Vulnerability: 4 Targets Hackers Might Utilize to Infiltrate Your Backup Solution

March 2, 2021

Webinars

View all

A Partner’s Perspective on Channel Success in 2021

March 23, 2021

XDR and Why it Matters to MSPs

March 24, 2021

Top Security Trends Impacting Technology Security Providers In 2021

March 25, 2021

White Papers

View all

Why Fortinet for my MSSP?

March 2, 2021

Small and Mid-Size Business Security: 4 Steps to Success

March 2, 2021

How SMBs Can Secure Endpoints and Remote Workers for the Long Haul

March 2, 2021

Upcoming Events

View all

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

Videos and Fastchats

View all

FASTCHAT: How SOAR Eliminates Security Challenges and Elevates Service Provider Revenues

January 6, 2021

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

FASTCHAT: How Old, Unpatched Technologies Are Creating New Security Threats for MSPs and Their Customers

December 3, 2020

Twitter

ChannelFutures

.@okta acquiring rival @auth0 in $6.5 billion all-stock transaction. #security dlvr.it/Rtzwdp https://t.co/4LvHCJuwsR

March 4, 2021
ChannelFutures

.@MicrosoftTeams features are coming to @MSFTDynamics365, the company announced at @MS_Ignite. #MicrosoftIgnite… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

.@PreciselyData acquired by Clearlake Capital, @TAAssociates. #digitaltransformation dlvr.it/RtzbKg https://t.co/1rNYnTScxq

March 4, 2021
ChannelFutures

Thanks for attending #CPVirtual. Here's a Day 3 wrap and a look ahead to #CPExpo Homecoming in November!… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

.@Veeam announces six annual Impact Partner Awards, with @SHI_Intl, @LogicalisUS, more. #cloud… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

#XDR can improve operational efficiency for #MSPs. @TrendMicro #security #endpoint #AI #threatintelligence… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

.@IBM adds two senior execs to leadership team at infrastructure IT spinoff, NewCo. @IBMNews @IBMPartners… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

RT @ChannelEurope: Craving more #EMEA news? Get the latest headlines, insights and commentary in EMEA directly to your inbox. Subscribe to…

March 4, 2021

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X