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Cisco Systems Acquires BroadSoft For $1.9 Billion

Cisco CEO Chuck Robbins
Chuck Robbins

Cisco Systems (CSCO) is acquiring BroadSoft (BSFT) for $1.9 billion to push deeper into cloud calling and contact center solutions, the networking giant confirmed this morning.

In some ways we're surprised by the deal, since Cisco CEO Chuck Robbins has been targeting rapid-growth acquisitions rather than slower-growth deals.

The BroadSoft deal is a strategic technology fit -- though not a blockbuster on the financial front, ChannelE2E believes.

BroadSoft specializes in cloud PBX, unified communications, team collaboration and contact center solutions for business. Those areas are a match for Cisco's core business. True believers include Optus, which is Australia's second largest telecommunications provider. Optus earlier this year introduced BroadSoft's BroadCloud services in that country.

BroadSoft has been growing -- but not at the rate of recent Cisco acquisitions like AppDynamics. For its Q2 2017, BroadSoft total revenue was $88.8 million, up 9 percent compared to $81.7 million in the second quarter of 2016. The company had a $3 million net loss in Q2 2017, slightly worse than a $2.9 million net loss in the corresponding quarter for 2016. The software firm expects to announce Q2 2017 results in early November.

According to a prepared Cisco statement:

"The acquisition of BroadSoft reinforces Cisco’s commitment to Unified Communications and enhances its ability to address the millions of aging TDM lines poised to transition to IP technology and cloud native solutions over the coming years."

Cisco's buyout of BroadSoft comes less than two weeks before Cisco Partner Summit 2017 in Dallas. Cisco will also have a major presence at ConnectWise's IT Nation 2017, according to ConnectWise's sponsor page for that event.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.