Doug on IP Comm – An independent voice on VoIP, telecom, and IP Communication

Broadsoft buys Packet Island… who’s next?

Posted on: October 8, 2009

Having bought up every other VoIP apps company it could get its hands on, BroadSoft is in the process of acquiring privately-held QoS monitoring firm Packet Island.   Hmmm…

BroadSoft says the acquisition is being made to address “the critical need” for ensuring QoS and QoE (quality of experience) for real-time (i.e. phone and video) communications.  The company gets an expanded portfolio to offer its existing (large, over 450 service providers) customer base of carriers, so service providers in turn can offer enhanced QoS assessments and monitoring of services and deploy VoIP and video services with guaranteed end-to-end carrier-grade service delivery.

Packet Island’s solutions offer lifecycle management for QoS/QoE, so you run them before deploying VoIP and video, do the deployment and run them to establish a baseline, then monitor and reassess (i.e. recurring revenue) on a periodic basis. There’s also the usual troubleshooting tools for pinpointing problems and some buzzwords throw in about “cloud” monitoring and DPI technology.

Terms of the deal were, of course, not announced between the two companies, but BroadSoft says it is keeping all Packet Island employees while Packet Island founder and CEO Praveen Kumar will be parked,er assume the role of BroadSoft’s chief Technologist if I’m interpreting the press release correctly.

Hmm….

OK, so BroadSoft gets a set of products and services (services = recurring revenue good) to offer its universe of carriers, but this is a couple of steps out of the company’s traditional VoIP application server space. Of course, BroadSoft has bought up pretty much all the other VoIP application server players (Sylantro, GENBAND), so it has to do something to continue to grow.  It would be interesting to know the terms of the deal, since BroadSoft acquired Sylantro at a firesale price (stock swap, assumption of debt).  If BroadSoft paid out cash,  that would have been one indicator (i.e.  generating cash so they can go buy firms). If it is a stock delay, that’s another indicator.

Regardless, it appears BroadSoft is starting to expand its taste for acquisitions so don’t be surprised to see a couple of more deals go down in the months to come.

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