Vonage to Grow UCaaS Portfolio With iCore Acquisition

Vonage officials are looking to boost its enterprise cloud communications capabilities by acquiring iCore Networks, which offers a range of collaboration and cloud services.

Vonage announced Aug. 20 that it will spend $92 million to buy the privately held iCore and expects the deal will close later this quarter. The acquisition will add to Vonage’s current unified communications-as-a-service (UCaaS) portfolio for midsize businesses and enterprises and bring greater scale into its efforts. It also will enable Vonage, which is best known for its consumer and small- and midsize-business (SMB) offerings, to go deeper into the higher end of the market, according to CEO Alan Masarek.

“Our strategy is to serve businesses of any size via a multi-channel distribution approach,” Masarek said in a statement. “With the addition of iCore, Vonage will have what we believe is the largest sales force in the UCaaS market, addressing midmarket and enterprise companies through a field sales organization that sells directly to customers and a channel sales organization that supports our extensive nationwide network of indirect channel partners.”

Vonage sells to SMBs via an inside sales team and online sales, he said. iCore comes with a large team of direct-sales representatives. It has more than 85,000 customer seats, with the average revenue per customer coming in at more than $4,000. More than 60 percent of its revenue comes from customers with more than 100 seats.

“Combined with iCore, we believe we will have the broadest multi-channel distribution platform in our industry and are ideally positioned to serve the full spectrum of the UCaaS market, from SMB to midmarket to enterprise,” Masarek said.

The UC space is highly competitive, with such top-tier vendors as Cisco Systems and Microsoft and a broad array of other significant vendors, from Avaya and ShoreTel to Mitel and Genband. It’s also a market that is quickly moving to a hybrid environment of both on-premises and cloud-based solutions. ShoreTel this week announced the release of its much-anticipated Connect solution, which gives users a single platform and interface for both their on-premises and cloud UC environments.

iCore delivers a range of communications (Web collaboration, Internet phone, instant messaging and presence) and cloud (infrastructure-as-a-service, disaster recovery, virtual desktops, cloud backup and email) services. In addition, both iCore and Vonage use the same BroadWorks call processing platform from BroadSoft, which will make integrating the two companies’ offerings easier.