ShoreTel officials are growing the company's cloud-based communications portfolio with the planned acquisition of Corvisa, a small company that comes with a range of software and contact center capabilities that they said could help grow ShoreTel's hosted revenues by as much as 30 percent.
The $8.5 million acquisition is the latest deal ShoreTel is making as officials look to accelerate the adoption of the company's Connect unified communications (UC) platform, which the vendor launched in August after two years of development. Connect is a common platform for its premises- and cloud-based UC offerings.
In November, ShoreTel bought M5 Networks Australia, part of its efforts to expand its reach globally.
With Corvisa—which the company is buying from Novation Companies—ShoreTel is acquiring the company's standards-based APIs and software development kits (SDKs), which will make it easier for programmers to develop third-party applications that can run atop the ShoreTel platform. At the same time, ShoreTel will be able to add Corvisa's session-initiation protocol (SIP) trunking technology to its own portfolio, becoming a SIP trunking provider and opening up new sources of revenue.
ShoreTel also will be adding Corvisa's stand-alone cloud-based contact center technology, which will enable the company to better integrate with non-ShoreTel communications offerings. In addition, ShoreTel will acquire Corvisa's data centers in Amsterdam and the United Kingdom, enabling it to further broaden the reach of its cloud services.
"The acquisition of Corvisa aligns tightly with our strategic plan and acquisition priorities," ShoreTel President and CEO Don Joos said in a statement. "Corvisa's technology and engineering resources are very complementary to ShoreTel. I'm excited about the robust APIs to accelerate application integration and the additional growth that an expanded cloud contact center will bring."
Corvisa has about 95 employees, with most of them being technical engineers who can help ShoreTel execute on its roadmap, officials said. The deal is expected to close late in the first quarter of 2016.
Cloud communications is a growing and increasingly competitive space. IDC analysts said the space will grow from $123 million in 2013 to $7.5 billion in 2018, while analysts with IHS Infonetics in March found that more than half the respondents in a survey said that by 2016 they will be running at least some of their UC services over private or public clouds.
"Cloud solutions are inherently more flexible than premises-based solutions, offering businesses the ability to scale users up and down, centralize management and deploy new features and applications quickly," Diane Myers, principal analyst for voice-over IP (VOIP), UC and IP multimedia subsystems at IHS Infonetics, said in a statement at the time.
The communications market is expected to consolidate as vendors make acquisitions to augment their portfolios. Nokia is in the process of buying Alcatel-Lucent for $16.6 billion, and Mitel over the past two years has made acquisitions to expand its cloud and mobile capabilities. Mitel made an unsuccessful $574 million bid for ShoreTel last year. Unify a year ago released Circuit, its new UC platform.
ShoreTel got into cloud communications when it bought M5 Networks for $146 million in early 2012 to complement its on-premises products, and the company has seen hosted revenues grow over the past couple of years. The addition of Corvisa falls in line with ShoreTel's roadmap. In an interview with eWEEK in October, Joos said that the company in 2016 will focus on integrating more applications into the platform, developing APIs to enable developers to create third-party apps and expanding the Connect platform into such areas as Canada and Australia.