Light Reading
UC vendor is holding its own against big names like Cisco as operators move to VoLTE and start deploying WebRTC.

Broadsoft Boosts Revenues 20% in Q2

Sarah Reedy
8/5/2014
50%
50%

Unified communications (UC) vendor Broadsoft managed to boost its second-quarter revenues by almost 20% year-over-year, as one analyst says it continues to win "more than its fair share" of the deals with service providers against big names like Cisco.

BroadSoft Inc. earned $1.7 million in the second quarter on revenues of $52.5 million, an increase of 19% compared to $44.0 million in the second quarter of 2013 and its highest quarterly result ever.

Jefferies & Co. Inc. Equity Analyst George Notter points out in a research note that the positive earnings, which beat analyst estimates of $49.4 million, come as Broadsoft has found its sweet spot between big names like Cisco Systems Inc. (Nasdaq: CSCO) targeting the high-end carrier channel and competitive over-the-top (OTT) players such as 8x8 Inc. (Nasdaq: EGHT) and RingCentral Inc. focused on very small businesses. (See BroadSoft Becomes Telecom Italia Partner and Business Market Rediscovers Its Voice.)

"One of the main barriers to the further development of the SIP Trunking and Hosted markets is the incumbent telecom operators themselves," Notter writes in the note. "Naturally, they're hesitant to proactively push these offerings as it effectively reduces their monthly service revenue by 15% to 70% vis-à-vis TDM (ISDN) lines running into enterprise PBXs."


Want to know more about the future of voice communications? Check out our dedicated rich communications channel here on Light Reading.


Notter adds that the emergence of competitive offerings is driving these incumbent operators to embrace SIP trunking and hosted UC, which is good news for Broadsoft. The UC vendor is actually playing in a number of technologies that are critical to service providers today as they work to keep their voice services front-and-center amongst OTT competition and create new revenue-generating services with WebRTC, voice-over-LTE and UC. (See VoLTE: So Close You Can Hear It.)

Notter says that the transition to VoIP and UC-based services for real-time communications has only reached 10% to 15% of enterprises and consumers. Coupled with the fact that VoLTE is just now being deployed across the globe, Broadsoft is well positioned going forward as well. (See Sprint Taps BroadSoft for VoLTE Transition and D2 & BroadSoft Test VoLTE.)

The company's CEO, Michael Tessler, said on the earnings call that VoLTE rollouts have been slow, but Broadsoft is involved with a number of business VoLTE projects in Europe that will play out over the next two years.

"Take a small business today that would have a fixed infrastructure, high speed broadband router, switching, etc., serving 25 employees," Tessler said, according to a Seeking Alpha transcript. "What we're starting to work with and we're starting to see the operators looking to plan is offers that would be completely wireless."

The vendor is not, however, betting solely on the service provider market. It also announced on Tuesday that it has acquired hospitality software provider SDD, one of several acquisitions in the past few years and further evidence that Broadsoft is looking to bolster its offerings for particular verticals to diversify its business. (See Euronews: BroadSoft Buys in Germany, BroadSoft Buys Into British Cloud and BroadSoft Acquires Adaption Technologies.)

Buoyed by the strong earnings, Broadsoft's share price was up 3.65% to $24.96 in Tuesday morning trading.

— Sarah Reedy, Senior Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
SReedy
100%
0%
SReedy,
User Rank: Blogger
8/5/2014 | 12:13:18 PM
Enterprise VoLTE
Interesting to see enterprise VoLTE called out as a segment of 4G voice. There's an interest in richer communication and collaboration there. An analyst also asked on the call about WiFi in the enterprise, and Broadsoft's Tessler said he thinks we'll see some small businesses going Wi-Fi on the prem and others going fully into the RAN with no infrastructure on prem. 

He said: "I do think that it's kind of a personal belief that if I was running a small business and I could outsource my LAN and broadband and protecting that network into the radio network, into the carrier network, that would seem to be a pretty interesting opportunity, pretty interesting way to save money and complexity."
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Huawei Video Resource Center
Network Solutions Help the Philippines Jump Ahead

9|17|14   |   2:59   |   (0) comments


In the past, the Philippines has under-invested in technology. Now, the CEO of Softshell talks about how Huawei products help the Philippines jump ahead as the economy improves.
LRTV Huawei Video Resource Center
VCS Observation for Safer Cities in the Netherlands

9|17|14   |   5:20   |   (0) comments


Holland's VCS Observation has been operating for 22 years. Its main goal is to get cities safer. CEO Wim van Deijzen tells us some of the challenges his company faces and how Huawei is helping to overcome these challenges.
LRTV Huawei Video Resource Center
A Conversation With Serbia's Ministry of Interior

9|17|14   |   4:38   |   (0) comments


At HCC 2014, the Assistant Minister of the Ministry of Interior of the Republic of Serbia talks to us about his projects and corporation with Huawei. Solutions like Safe City and E-Government and services like cloud computing are just some of the areas his department is interested in.
LRTV Huawei Video Resource Center
IHS Analyst Discusses eLTE at CCW 2014

9|10|14   |   7:09   |   (0) comments


Thomas Lynch, associate director of critical communications at IHS Technology, talks about broadband in critical communications.
LRTV Huawei Video Resource Center
TCAA on Huawei eLTE: A Broadband Solution for Mission-Critical Communications

9|10|14   |   2:29   |   (0) comments


At CCW2014 in Singapore, the TCCA's Phil Kidner talks about the importance of broadband data for critical communications.
LRTV Custom TV
Spotlight on Cisco: SDN for Optical Networks

9|8|14   |   9:27   |   (0) comments


Cisco's Greg Nehib talks OpenFlow and more on the 'Software-Defined Networking for Optical Networks' panel at the Big Telecom Event in June 2014.
LRTV Custom TV
Cisco's Evolved Programmable Network (EPN)

9|8|14   |   4:05   |   (0) comments


A look at the various demos Cisco showed at Light Reading's Big Telecom Event highlighting Cisco's EPN innovation and how SDN and NFV technologies are enabling a variety of new services.
LRTV Huawei Video Resource Center
The Future of Ultra-Broadband, With Kevin Kelly (UBBF2014)

9|5|14   |   1:13   |   (0) comments


If you think the technological changes we've seen up to now are astounding, just wait until you see what the future has in store. Discuss upcoming breakthroughs with Kevin Kelly, Founding Executive Editor of Wired Magazine, at the Huawei Ultra-Broadband Forum on September 24.
LRTV Huawei Video Resource Center
The Inaugural Optical Innovation Forum in Nice

9|2|14   |     |   (0) comments


More than 170 attendees from network operators, service providers, analyst firms, and component companies from around the world convened in Nice in June for the inaugural Optical Innovation Forum, co-produced by Huawei and Light Reading.
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
Upcoming Live Events!!
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Introducing 'The New IP'
Steve Saunders, CEO and founder, Light Reading, 9/11/2014
Glimpsing the Self-Driving Car
Dan Jones, Mobile Editor, 9/12/2014
AT&T to Launch WiFi Calling in 2015
Sarah Reedy, Senior Editor, 9/12/2014
AT&T: We'll Bundle Fixed Wireless & DirecTV
Mari Silbey, Independent Technology Editor, 9/15/2014
New NFV Forum Focused on Interoperability
Carol Wilson, Editor-at-large, 9/16/2014
Like Us on Facebook
Twitter Feed