US: Cisco acquires Broadsoft for $1.9 billion

By Barry Eitel

SAN FRANCISCO (AA) – Cisco announced a $1.9 billion deal Monday to acquire BroadSoft -- creator of business communications software.

The acquisition is a bid to grow Cisco’s reach beyond networking and routing offerings for its business customers.

Last year, BroadSoft released a team communications tool called Team-One that has become a popular management program.

Founded in 1984, Cisco built its business around routing hardware but with the growth of cloud computing, it has focused in recent years on business software tools.

"Together, Cisco and BroadSoft will deliver a robust suite of collaboration capabilities across every market segment," Rowan Trollope, a senior vice president at Cisco, said in a statement. "We believe that our combined offers, from Cisco's collaboration technology for enterprises to BroadSoft's suite for small and medium businesses delivered through service providers will give customers more choice and flexibility.”

Cisco has been aggressive in diversifying its portfolio of products – the purchase of BroadSoft is the company’s 200th acquisition.

Last week, Cisco said it intended to buy machine learning company Perspica and, in January it purchased AppDynamics for $3.7 billion. AppDynamics, which builds software that manages apps, was poised to go public before the deal.

Cisco has bought four other companies in 2017.

With the acquisition of BroadSoft, Cisco hopes to better compete with communications software giants such as Google, Facebook, Microsoft and Slack.

"As businesses continue to move toward the cloud in search of simplicity and speed, joining Cisco will allow us to deliver best-in-class collaboration tools and services,” according to BroadSoft CEO Michael Tessler. “BroadSoft's hosted offerings … are highly complementary to Cisco's on-premises and enterprise-centric HCS offerings.”

The deal is expected to close early next year and BroadSoft will be folded into a division led by Trollope.