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Networks & Infrastructure
BroadSoft buys Sylantro
VoIP applications server market consolidation continues, establishing a clear market leader
by Doug Allen
Hosted VoIP/multimedia application server vendor BroadSoft has bought its former chief rival, financially troubled Sylantro Systems, under undisclosed terms. The deal effectively makes Broadsoft the undisputed market leader, leaving only Comverse as a competitive threat, albeit one with a very different solution aimed at a broader end-to-end IP services infrastructure deployment.
BroadSoft is now the sole remaining pure IP application server survivor. It plans to retain the majority of Sylantro’s staff for a three to six month transition period, and then pare down that number for permanent BroadSoft positions. Sylantro CEO Marco Limena has already left the company, according to BroadSoft.
The deal had been expected for several months, and comes as no surprise given the macroeconomics of ongoing NGN carrier spending. BroadSoft appears to be following a strategy of increasing market share by acquiring other vendors’ customers and integrating their platforms into its overall product portfolio. BroadSoft had bought IP gateway vendor GENBAND (formerly VocalTec)'s M6 Communication Applications Server, product line and related customer base last August. Sylantro was the last remaining alternative to BroadSoft, the latest victim of market consolidation in the face of shrinking service provider spending.
The move comes at a good time for BroadSoft financially, as the company reports annual revenue increases of over 1000 percent and a burgeoning employee count that has jumped from under 100 to 300 currently. It continues to tap new markets for its hosted media servers, releasing a hosted unified communications business service last October tied to its own BroadWorks business telephony platform and based on the Microsoft Solution for Hosted Messaging and Collaboration version 4.5. BroadSoft’s latest pickup should help it continue to focus on IP service and application development, based on open APIs that allow customers and third-party developers to create their own customized applications. Both companies released application development platforms last year: BroadSoft’s Xtended Marketplace and Sylantro’s Synapps (for Web services) (see BroadSoft extends olive branch to Web 2.0 app developers ).
BroadSoft will continue to market, sell and support the Sylantro Multiplay Application Feature Server/SYNERGY product line, both directly and through sales partners of both companies, which broadens the company portfolio and its addressable market, but may also prove a difficult and expensive proposition, as each platform has disparate management systems, basic design, and functionality. It’s unclear if BroadSoft will integrate some of its brethren’s functionality or technology into its own flagship BroadWorks line, but certainly the parent company stands to benefit from the infusion of technical expertise.
The acquisition adds 95 carrier customers, including AT&T, China Newcom, KT, Nuvox, QWEST and Swisscom, to Broadband’s balance sheet, for a total customer tally of more than 520. (However, some of Sylantro’s customers may by using servers only in niche, limited deployments.) Sylantro’s well-developed distribution channels, based on close partnerships with major equipment vendors, especially in the mobile space, should be a major advantage for BroadSoft. Sylantro also brings far-flung technology centers to the table, with development and customer operations centers in Montreal, Dallas, Bangalore, Sydney, Belfast and Gaithersburg, Maryland.
“Following these acquisitions [including GENBAND], BroadSoft emerges as the only remaining company that specializes in hosted VoIP application servers,” writes Joe McGarvey, a principal analyst at Current Analysis, in a recent intelligence report. “Competition in the hosted VoIP market going forward will now be between two differing models: the standalone approach forwarded by BroadSoft or an end-to-end approach [complements application-layer equipment with session control and session management equipment] taken by just about every other competitor, including Comverse, Nortel, Sonus, Thomson, Nokia Siemens Networks, MetaSwitch, and others.”
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