On January 29th, Sangoma announced a definitive agreement to acquire Star2Star, a cloud-based Communications as a Service provider with a leading UCaaS offer. We’re pleased that the deal closed last week.
So, why did we do this deal? First off, Star2Star targets medium and large enterprise and managed service providers, with channels that don’t really overlap with Sangoma, so the “fit” is very nice. Star2Star has almost 10,000 business customers with tens of thousands of locations. We feel like now we can confidently go after and win the full spectrum of UC prospects, from small business to large enterprise.
Together, we will have increased scale, and given both of us are profitable, we will remain a profitable entity with approximately 70% recurring revenue. As a Channel Partner or end-customer, you shouldn’t have to worry about whether we’ll be around in the future. Whatever side you come from, the transaction represents a very positive development for the future of the new Sangoma (the combined company) since there will be benefits from the improved scale/financial stability, a broader portfolio of products, expanded global services, and a continued commitment to invest in innovation.
We feel we’ll have the most complete UC portfolio in the market: From on-premises to Cloud UC that can work in businesses of all sizes, with our own phones, headsets, gateways, SBCs and SIP Trunking. As such, a business would be able to deploy Sangoma products across their entire enterprise, avoiding any interoperability “finger pointing” which crops up sometimes. Additionally, we’ll have a full suite of Communication as a Service offers, from UCaaS to Video Meetings to Collaboration to Wholesale Voice Services to Access Control. Truly all that a business needs from a single vendor, obviating the need to put all kinds of different communication products into your enterprise network.
During the past few months, when we were not yet closed, we understandably received questions about the future of the different UC platforms. Yes, we understand them. We got the same ones when Sangoma merged with Digium and we said both Switchvox and PBXact would remain. And both have remained. So we certainly understand. And all UC platforms will remain now.
As I intimated above, the target market overlap was not that great. Switchvox and PBXact predominantly served the SMB. And both are also on-premise products in addition to cloud products. And Star2Star predominately services the mid-size enterprise to MSP market, with a cloud offer. Because of that, all platforms with remain as long as there is market demand for them. We may choose to do work to consolidate to a single mobile and desktop client, like we have done with Sangoma Connect for Switchvox and PBXact, and other similar things, but there are no plans to announce any of that in the short term.
And Sangoma plans to continue to sell, develop and support our hardware business including phones, cards, gateways, SBCs, and UC appliance businesses. And we also plan to continue to be the stewards of Asterisk and FreePBX. So, no big changes.
Right now, we need to integrate the teams and that will take some time. Customers on both sides will continue to receive the same products, quality and service they have come to expect from both companies.
If you are a partner, we are looking forward to growing with you. If you are a prospect or customer, we look forward to serving you in the future!
Throughout March, we conducted a weekly “Women in Tech” podcast with four different women in Sangoma, ranging from engineering to product management to general manager to lawyer. Each of these women told interesting stories and gave excellent advice.
Advice, I might add, pertinent to everyone in the workforce, not just women. Their stories are interesting and powerful.
Setareh Nezami (Product Management) talked about “Leading Without Authority,” important for anyone who needs to get other organizations to execute.
Michelle Fleming (Legal) talked about the need to speak up.
Bhawna Gaba (Engineering) talked about needing to be confident, taking a chance, and finding a mentor.
Paula Griffo (General Manager) talked about loving the fast-paced tech industry and needing resilience.
To listen to their stories, please go here.
I would recommend taking the time to listen. It’s well worth it.
In January, I did a video interview with Rich Tehrani. Usually, we’re in Florida for the IT Expo / Tech Super Show at that time of the year, and we do an in-person video interview. I’ve been there so many times I’ve lost track of how many we’ve done together. When he first started doing video interviews, I believe at a show in Los Angeles, if I recall correctly, it was a very new thing, and I think I might have been the 3rd person he did it with. Yeah, Rich and I have known each other a long time, going back to 1998.
We were just little kids then…
And while I’ve talked to Rich multiple times in 2020, we decided to do another video interview like we usually do during this January time frame.
We just did it remotely this time.
We talked about a bunch of things, such as the Frost and Sullivan UC and Collaboration Competitive Strategy Leadership Award that we received just a few weeks before the interview. I won’t go over that here because I’ve written about that already.
He also asked me how our integration of VoIP Innovations is coming along. It’s going well, and we’ve put investment into the wholesale services / SIP trunking business and CPaaS. We have introduced a service that is available now that helps address Caller ID spoofing. It is available both with our Wholesale SIP trunking but also can be used by other carriers, available via an API. It combines analytics, caller authentication, and verification to help address Caller ID spoofing now. We also introduced new fraud mitigation and E911 monitoring solutions in 2020.
We’re also currently working on complying with STIR/SHAKEN.
And he asked me about what’s next for Sangoma. Obviously, I could not talk about Star2Star at that time because it was not announced yet. Still, we did touch on our vision of continuing to see Sangoma adding to our suite of Communication-as-a-Service product portfolio. Beyond UCaaS, we also offer other “As a Service” offerings such as retail and wholesale SIP trunking, CPaaS, Fax, Video Meetings, and our soon-to-be-released access control solution. Similar in concept to our “End-to-end UC Solution” that I discussed when talking about the Frost and Sullivan award, we want to offer “End-to-end As a Service Communications.”
As always, it was a pleasure talking to Rich. I am looking forward to doing it in person at some point, hopefully relatively soon. To watch the video interview, please go here.