**Editor’s Note: Please click here for a look back at the biggest channel-impacting mergers and acquisitions from 2017.**

Star2Star Communications‘ merger with Irish cloud communications company Blueface, said to be worth $500 million, creates a top provider in the rapidly growing global UC market.

The combined entity will be called StarBlue, and the operating companies will retain their existing trading names in their respective markets, with Star2Star in the United States and Blueface in Europe, the Middle East and Africa (EMEA).

Star2Star’s Alan Foy

According to Gartner’s 2017 Magic Quadrant for global UCaaS, Star2Star’s business has been skewed to the North American market, and its service coverage and number of channels in Europe and Asia Pacific are limited.

“On cue, as 2018 starts, we already have another consolidation move, and more are inevitable as the UCaaS market hits critical mass,” said Jon Arnold, principal analyst at J Arnold & Associates. “The moves we saw during 2017 send a clear signal that size matters for cloud, and this deal between Star2Star and Blueface is a prime example. Aside from needing scale to be competitive, UCaaS providers need geographic reach, and this move will allow StarBlue to compete for global enterprises that previously could only be served by Tier 1 carriers and vendors.”

Alan Foy, group CEO of Star2Star and Blueface, tells Channel Partners the merger combines two “very complimentary businesses that operate in completely different jurisdictions, so from that perspective, there’s no huge overlap … and the DNA of both companies are really innovative and entrepreneurial.” Norman Worthington, Star2Star’s CEO, is now executive chairman of Star2Star and Blueface, while Michelle Accardi, Star2Star’s president and chief revenue officer, will assume this role across the group.

“As a combined entity, we do have this full spectrum technology platform and product set, and service set, which I think all of our partners around the world will benefit from,” Foy said. “In fact, in 2018, you’ll see a number of product announcements around new products and new features … that I think our partners will really look forward to seeing in the marketplace. In the unified communications space, there has been quite an amount of consolidation globally, but actually there are very few companies that can offer a truly global and localized experience around the world. We put a huge amount of effort in Star2Star and Blueface to make sure that we can deliver a seamless localized experience around the world, so for our partners, that means if they have companies that operate in more than one jurisdiction, we are probably the best-placed market player to service those customers on their behalf.”

Last fall, Cisco announced it would acquire cloud UC software and services provider BroadSoft in a deal worth $1.9 billion, and last summer, Windstream completed its $227.5 million acquisition of Broadview Networks, the provider of cloud-based UC to SMBs.

Star2Star partners will be able to service customers not just …

… in North America, but also Europe, and vice versa for Blueface partners, Foy said.

“And as part of our forward momentum and planning, we are actively considering new markets and new territories,” he said. “To be a truly global UCaaS provider, you need to have that global reach and constantly push those boundaries.”

Star2Star’s partner approach will transfer and transpose to Blueface partners “quite well,” Foy said.

“For a Blueface partner in Europe, they’re going to benefit from Star2Star’s deep insight into how partners work and also what they need to help be successful in the marketplace,” he said. “In North America, Star2Star’s partner program is very highly evolved and best in class. In Europe, we will take lessons from that partner ecosystem and program, and try our best to adapt it really for the marketplace in Europe.”

Sarasota, Florida, will remain the North American headquarters while Dublin, Ireland, will remain as the EMEA headquarters for Blueface.