Dive Brief:
- Cisco announced its acquisition of BroadSoft, a cloud-based communication solution, on Monday, according to a company announcement. This will be Cisco's 200th addition to its acquisitions, which have become the foundation for the company's "innovation strategy" centered around the IoT, artificial intelligence, application intelligence and other advanced technologies, according to Rob Salvagno, VP of Cisco Corporate Development.
- Cisco wants to deploy BroadSoft's cloud-based calling and communication solutions through partnered service providers with Cisco's hardware and services offerings. Cisco purchased the company for $55 per share in cash, which equates to $1.9 billion, according to the announcement.
- Closing conditions are expected to be finalized during Q1 of 2018, and until then, both companies with continue to function independently. Upon completion of the acquisition, BroadSoft employees will become a part of Cisco's Unified Communications Technology Group.
Dive Insight:
Cisco grew its share by 15% in Q4 of 2016 likely due to its push to move from onsite communication tools to cloud-based ones. In addition to adapting to the digital migration trend, it is also embracing the realization it cannot survive without diversifying its product portfolio
Cisco has pursued many acquisitions over the last two years. Cisco announced its plans for intent-based networking to improve networking within the enterprise population in June. All added mthods of enterprise communcations are Cisco's attempts to remain relevant in the way companies communcate.
However, its earnings fell by 9% in its largest product category, switching sales, in August. Since the report, the company's CFO announced a redesign of its product categories to better reflect its changing offerings. The categories include security, infrastructure platforms, applications and services, among others.
Cisco announced new services driven by AI and ML for risk management, cost reduction and training in October to alleviate the growing skills gap in tech. By promising more efficient and widespread solutions, Cisco is ensuring its place among enterprise tech providers.
