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Broadsofts purchase of HIPCOM justified with 5 year deal signed with BT March 6, 2014

Posted by Matthew Townend in Uncategorized.
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Last week BT Wholesale & Broadsoft announced a 5 year distribution agreement. This really justifies the  purchase of HIPCOM by Broadsoft earlier in the year, as it was widely rumoured in the channel that BTW may move away from HIPCOM & therefore Broadsoft. This potential move was  not because HIPCOM offered a poor service more because the multitiered financial relationship that BT had with Broadsoft via HIPCOm just would not work in a channel environment with to many mouths to feed.  This also clarifies BTW strategy which will give the channel confidence to enter into longterm contracts.

illume noted that in the  the announcement it was stated “As part of the agreement, BT Wholesale will become a preferred BroadSoft distributor in the UK to communications providers looking to provide Hosted IP Centrex Services to the indirect channel”, we will have to see what preferred distributor means as obviously Broadsoft have some very large existing distributors of their services in the UK already.

Marc Timmermans, Director Portfolio Development, BT Wholesale highlighted the importance BT are placing on Hosted UC.

“Hosted Communications Services is a key pillar in BT Wholesale’s strategy and is at the heart of our plans to rapidly expand our indirect channel business. By working with us, communications providers can offer their business customers a complete communications service, whether it be Hosted IP Centrex, SIP Trunking, Contact Centres or Inbound Services, all run, managed and owned by BT.”

On friday Broadsoft also announced their latest financial result and also gave some insight to their on going strategy. Performance continues to be strong with full year, total revenue was $178.5 million, an increase of 8% compared to $164.8 million in 2012. The results indicated strong performance in their core Business Hosted UC & Broadcloud businesses, with weaker performance in consumer and they indicated that outside of the US they had not seen the growth in the SIP trunking business they had seen in the US or though there were signs this was changing. They indicated that was because the markets were not as mature, obviously we are seeing strong growth in the UK for SIP Trunking, but often people choose to deliver this directly from SBCs rather than from their Application server infrastructure.

The other clear theme of the call was the opportunity and progress Broadsoft are making selling to mobile operators, with particular focus on the future opportunities of offering voice over LTE type services.  Although generally their are still some concerns about LTEs ability to carry voice, this is a clear direction for Broadsoft and are gaining traction selling to Mobile providers who maybe only offering 3G business services today. Mike Tessler CEO Broadsoft mentioned that Broadsoft are well position to service Enterprises as they move away from their premise based PBX architectures which were designed to work within the confines of the LAN & lack any real mobility capabilities, and where maintaining a hardware box & wiring closet were key to handling  enterprise comms requirements to a time when people are communicating with mobiles, tablet and from anywhere around the world.  illume think VLTE will take time to become a market reality in most market, in the meantime however extending Hosted UC capability over mobile and wifi environment is clearly key to Broadsofts growth opportunities.

illume is also interested to see how the recent purchase of Finnacom in Germany and Hipcom in the UK may help re invigorate Broadsofts previously announced federation strategy which has gone a bit quiet in the last year. By effectively having their own operator in Germany and UK can they now offer the ability to their customers to offer B end services in these countries, it will be interesting to see how this develops further.




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