Scott Kinka

By Scott Kinka, Chief Technology Officer, Evolve IP

On the opening morning of its Connections conference, BroadSoft execs dropped a bomb: Cisco had agreed to acquire the cloud UC software and services provider. The interwebs immediately caught fire. [Editor’s note: Guilty as charged.]

The commentary that followed on Twitter, LinkedIn, tech message boards and in industry (tech and channel) publications ranged from slightly self-serving, to moderately alarmist, to downright irresponsible.

Take a breath.

Here’s my view: The company largely credited with powering and securing the Internet (Cisco) and the company that helped pioneer communications over the internet (BroadSoft) have decided to come together. It’s complicated, it’s interesting, and to me, it’s a good-news story. My company, Evolve IP, has been a very large customer and partner of both Cisco and BroadSoft for more than 10 years, and I have some thoughts around the hyperbole and commentary stemming from the acquisition news.

True or False: “This is the death knell for premises-based PBXs!”

Verdict: Maybe. But not tomorrow.

Avaya’s bankruptcy difficulties and Cisco’s purchase of a born-in-the-cloud UC software leader certainly demonstrate that the hardware PBX tide has turned. But according to Frost and Sullivan’s most recent North American Hosted IP Telephony and UCaaS Market Forecast, hosted IPT and UCaaS currently make up only 9.9 percent of the U.S. addressable market — and likely significantly less worldwide. With an annual expected CAGR of between 20 and 30 percent year over year for the foreseeable future, cloud wins the sales war. On-premises companies will have to change strategy. But the game is not yet over, and there is plenty of territory to be won for every type of offering.

True or False: “This is a validation of the ‘built on open source/in-house’ model.”  

Verdict: False

First off, nothing is built 100-percent in-house. Every popular platform leverages SIP stacks, media servers, SBCs and UC platforms that are both paid for and open source. Somewhere, under the covers, is someone else’s code. It may be deep, but it’s there.

However, proprietary brews of open-source software have been shown to create interoperability challenges (also noted by Frost and Sullivan in the paper mentioned above). As it relates to UCaaS, proprietary + open source can and has meant scale and geography challenges and enterprise support issues. Makers of these platforms would argue that they are quicker and more nimble at addressing customer requirements. Consider that BroadSoft is based on standards and open APIs too, but it is supported by a community of application providers with deep integrations at the ready, and service providers, like Evolve IP, that have invested millions in creating valuable IP that sits on top of BroadSoft’s stable underpinnings.

Lastly, consider that several of these open-source platforms are very publicly “exploring strategic options,” even as we speak. Cisco, with a massive enterprise base, could have picked any of them, but …

… BroadSoft got the nod. Think about it.

True or False: “Enterprises will not be constrained by the pace of large companies like Cisco.”  

Verdict: False

To expand further on the above point, Cisco purchasing BroadSoft’s extremely large deployed UCaaS base and its entire community is directly in line with both Cisco’s strategy and the buying habits of enterprise IT. Enterprise IT wants options, interoperability, stability and scalability. Every UCaaS player out there talks about “going up market.” Will enterprise IT be more comfortable buying services based on Cisco, or on open source? We can argue the merits of each all day, but we know what most enterprises will decide.

True or False: “This will be disruptive to the channel.”

Verdict: True — but the level of disruption depends on which channel.

VARs will need to cozy up to the idea of hosted UCaaS and perhaps give up the dream that they’re going to build a cloud in their data closets. Traditional carriers may have to embrace the fact that they live on Cisco/BroadSoft infrastructure or just leverage BroadSoft to do it for them. The truth is, there may be channel conflict between private-labelers and BroadSoft’s own BroadCloud efforts.

Let’s be honest: If hardware and software companies were good at (or interested in) selling and servicing their own stuff, they wouldn’t need the channel. You need only look at the history of Microsoft’s and VMware’s cloud expeditions over the last decade to see that every strategy required someone else to sell, service, host, run or deliver product in some way. That’s why both of these companies have remained extremely relevant to the channel (and to Evolve IP) as they’ve changed and adjusted their cloud strategies to new market conditions.

There are a few things we can all agree on:

Organizations that take advantage of this market opportunity will be the ones that are honest with themselves, that take a breath before they react to this news, and that respond to the needs of their target customers with cost-effective solutions that make sense for all parties. For a lot of businesses (particularly large ones), those solutions will be based on Cisco.

What does all of this mean to service providers? Evolve IP has partnered with Cisco from the beginning, and we’re excited that our network vendor and our UC platform will share a common vision going forward. We’re also pleased that the communications we’ve gotten from Cisco and BroadSoft have reaffirmed their commitment to the service-provider channel. Cisco is and always has been service provider-friendly. We expect that will continue. It’s been reaffirmed in this transaction. As stated on the investor call, “We have no intention of competing with our service providers.”

In short, two of the channel’s critical partners came together this week. I say, “congrats.”

Scott Kinka serves as Chief Technology Officer for Evolve IP, leading its product design, development and go-to-market strategies. With a keen sense of not only what the market is asking for, but what the market needs, Mr. Kinka has led his team to develop cloud-based technology solutions that have been well received in the market, won various awards for innovation and reduced their customers’ total cost of ownership.