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TMCnews Featured Article


October 15, 2010

Broadvox, Cypress Merger Addresses Cloud-Based Aspirations

By Paula Bernier, Executive Editor, IP Communications Magazines


In an effort that appears to help Broadvox meet its cloud-based aspirations, the company today announced plans to merge with Cypress Communications. Both companies play in the VoIP and unified communication services space.

Financial terms of the deal, and leadership arrangements following its close, which is expected in 60 to 90 days, were not disclosed.

As discussed in the cover story of October’s INTERNET TELEPHONY magazine, Broadvox is known as a SIP trunking services specialist, catering both to carriers and small and medium enterprises in the U.S. and Canada. But recently the company, which has an eye on expanding its penetration in enterprise accounts, began broadening its portfolio to include cloud-based services liked hosted IP PBX (News - Alert), which it sees as complementary to SIP trunking.


Meanwhile, Cypress Communications helped define the unified communications as a service category and has been providing hosted communications to small and mid-sized businesses and enterprises for more than 25 years, according to the companies.

"We are excited about this opportunity to enter into a merger agreement with a leader in unified communications as a service," says Andre Temnorod, chairman and CEO at Broadvox. "The new, combined company will be in a position to expand its ability of providing high-quality and innovative services to our target markets and this strength will be a key to our continued future success. While we look forward to finalizing the transaction, it’s important for our customers, partners and other stakeholders to know that it is ‘business as usual’ at both Broadvox and Cypress Communications."

That means customers of both companies’ solutions will continue to receive the same feature sets, phones and platforms.

Stephen L. Schilling, CEO and president of Cypress Communications, explains that what the merger does mean is that the combined Broadvox and Cypress will be a market leader serving carriers, SMB and SME VoIP segments with one of the largest VoIP networks, and 24x7 support and service.

In a recent interview with TMC’s (News - Alert) INTERNET TELEPHONY magazine, Broadvox’s Temnorod said: “We’re focusing our product development … on everything in the cloud.” He added that Broadvox was “about to roll out a virtual and hosted PBX product.”

He added that the company will also have hosted Microsoft Exchange and several other hosted e-mail systems and plans to bundle such services with its SIP trunking product. Given the market already has seen a plentiful supply of hosted PBX solutions, he added, Broadvox intends to differentiate its offer based on the way it packages, prices and supports the services.

“The majority of providers out there – and you’re right, the product has been around for quite some time – the way they’re pricing their product, it’s per seat with the included voice calling regardless of how many calls your entire domain can make at any given time,” he says. “We separate voice and hosted PBX, we take the voice out of each seat….”

That, Temnorod says, gives customers the flexibility to vary how many calls they can make in and out of the PBX. David Byrd (News - Alert), Broadvox’s vice president of marketing and sales, says separating the pricing of communications usage from per seat licenses reduces overall costs by around 50 percent.

The planned merger of Broadvox and Cypress is among a spate of recently announced service provider mergers. In mid September PAETEC announced its intention to acquire Cavalier Telephone. That same month Massachusetts-based metro fiber and bandwidth provider Lightower Fiber Networks announced it would buy New York-based dark fiber network builder Lexent Metro Connect.  Around the same time Lightower completed its previously announced acquisition of Veroxity Technology Partners, a provider of fiber-based data and Internet connectivity. September also marked the close of a three-way merger of MegaPath, Covad and Speakeasy. The company, which provides businesses of all sizes with voice, data and security services over its nationwide IP network, operates under the MegaPath name.

A month earlier broadband wireless service providers Airband and Sparkplug (News - Alert) announced their plans to merge, as discussed in the September cover story of TMC’s NGN Magazine. Meanwhile, Windstream revealed plans to snap up Q-Comm subsidiaries Kentucky Data Link and Norlight. The summer also saw Windstream close its acquisition of Iowa Telecom; that followed Windstream’s close of its NuVox purchase in February and of its Lexcom buy in December.

Of course, all these deals pale in comparison to CenturyLink’s plans to buy Qwest in a $10.6 billion stock swap, which will place the once little-known telco in the No. 3 U.S. telco position, behind AT&T and Verizon. CenturyLink (previously CenturyTel) last year acquired Embarq, the former local telephone operations of Sprint.

PricewaterhouseCoopers Transaction Services (News - Alert) in its annual mid-year U.S. M&A forecast said about the technology space: “Record profits and favorable revisions in investors' expectations will drive M&A as a means of accelerating innovation cycles. The ‘new R&D’ will continue to drive mid-market transactions. “




Edited by Stefania Viscusi


 
 
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