Comcast Business acquires Masergy at 'opportune time,' say industry analysts

Comcast Business' planned acquisition of Masergy is a natural fit for the cable operator and comes at an "opportune time," according to industry analysts.

Businesses are now investing more of their IT budgets in remote access technologies, SD-WAN and cloud connectivity to support home workers as a result of the pandemic. "Comcast really bought [Masergy] at an opportune time because we should see some prolonged growth here," says Zeus Kerravala, founder and principal analyst of ZK Research. Kerravala frequently works with Masergy and also periodically works with Comcast.

As an MPLS, VPN, SD-WAN and managed services provider, Masergy is a great fit for Comcast Business, says Rosemary Cochran, principal and co-founder of analyst firm Vertical Systems Group. In addition, Masergy brings its own network, plus over 1,400 international and enterprise customers across 102 countries, which could boost Comcast's reach to midsize and large enterprise customers.

Masergy also has a background in managing hybrid networks such as SD-WANs, "and they have the expertise to do integrations such as cloud connections with a lot of partners and they pay a lot of attention to the service overlay," says Cochran.

The combination of Masergy and Comcast Business could be "pretty competitive" to incumbents such as AT&T and Verizon in the managed services and SD-WAN markets, adds Kerravala.

"Given the year Masergy had – apparently they had a very good year because the pandemic drove a lot of work-from-home and SD-WAN – the valuation was probably pretty good," says Kerravala. "Comcast wasn't going to buy an equipment vendor; they wanted an actual service provider that would match them. When you think about the landscape of who that would be, there aren't a lot of managed service providers that also have their own network."

Increased focus on home workers

Masergy's remote access services for home workers could benefit Comcast Business' ability to provide managed services to a distributed workforce. SD-WAN Home and SD-WAN On the Go are two new services Masergy launched last October to better address the connectivity needs of remote workers.

SD-WAN Home is directed at top executives, call center representatives, video production employees and others that need a high level of "connection resilience" and the ability to prioritize work traffic. The service comes with a Fortinet Secure SD-WAN device with firewall and routing capabilities, and users have the option to add on unified communications features such as a Wi-Fi-enabled video phone. SD-WAN On the Go is Masergy's SD-WAN option for mobile workers that includes a software-based client and VPN that uses IPsec tunnels for secure remote access to enterprise networks.

Last month, Masergy launched its Performance Edge service, which addresses broadband performance for last-mile access and reduces packet loss for remote workers, SD-WAN, SASE and MPLS customers.

"This is a very smart acquisition by Comcast Business. Masergy has been one of the most disruptive players in the market for more than a decade," Gary Barton, principal enterprise technology and services analyst at GlobalData, said in a statement. "It has intelligently designed its software-defined networking infrastructure and developed an attractive collaboration services portfolio. However, much of its success has been generated by its flexible approach to customer service in terms of commercial models and service delivery."

— Kelsey Kusterer Ziser, Senior Editor, Light Reading

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