Comcast Business deals for Masergy to help speed its way up-market

In a move that will accelerate its ability to move up-market in commercial services, Comcast Business has struck a deal to acquire SD-WAN and cloud platform specialist Masergy.

Financial terms were not disclosed, but Comcast Business said the deal will speed up its ability to serve large and midsized business customers, particularly among US-based organizations that run multi-site global operations.

In Masergy, Comcast Business will get its mitts on a company that serves more than 1,400 customers in about 100 countries. The deal will broaden Comcast Business' range of products for larger business customers, tacking on Masergy's lineup of managed SD-WAN, unified communications-as-a-service, call center-as-a-service and managed security.

"Masergy provides a perfect complement to our portfolio of enterprise services and solutions and will allow us to instantly and dramatically amplify our growth in the global enterprise market," Bill Stemper, president of Comcast Business, said in a statement.

Update: Comcast intends to retain Masergy's employees, including CEO Chris MacFarland, a Comcast official said. The Masergy brand will continue on post-deal, but will become part of Comcast Business, the official added.

Comcast Business cut its teeth serving small businesses and home-based workers via the company's widely deployed DOCSIS network. But it started to move aggressively into the midsized business market around 2010, and then started to target the enterprise segment, with a focus on the Fortune 1000, in 2015. Meanwhile, Sky, the UK-based company Comcast acquired in 2018, launched a small business services play, called Sky Connect, in March 2021.

"Comcast's significant access network assets in the US, and to a lesser extent the UK, form the ideal partner to Masergy's global SDN network," Gary Barton, principal enterprise technology and services analyst at GlobalData, said in a statement. "Masergy's capabilities will also add credibility for Comcast in areas such as cloud and security, which will be vital in attracting multinational corporations as clients."

Though it's taken time for Comcast Business' run at the midsized and enterprise markets to make major contributions, the decision to target those markets has helped to fuel growth at the unit.

Comcast pulled in $2.2 billion in business services revenues in Q2 2021, up 9.9% from the year-ago period, but doesn't break out how those revenues are distributed among small, midsized and enterprise customers. However, Comcast Business, which is now on an annual revenue run-rate of about $9 billion, added 17,000 net new customers in Q2, and 70,000 over the past year. Much of that growth was driven by improvements in the small business sector as companies started to recover from the initial impact of the COVID-19 pandemic.

But Brian Roberts, Comcast's chairman and CEO, did make note of the company's work to move up-market to serve larger business customers on the company's Q2 earnings call in July. "Every couple of weeks, I get an email that talks about some major accounts that we've just won for the first time, and it could lead to way more volume over time," Roberts said then.

The deal for Masergy is hardly the first time Comcast Business has gone to the till for a strategic acquisition. Comcast snapped up Ireland-based unified communications specialist Blueface in January 2020, and added managed Wi-Fi expertise with its 2019 acquisiton of Deep Blue Communications. Comcast got its first taste of the midsized business services market when it acquired Chicago-area CLEC Cimco Communications in 2009.

Update: Also this week, Comcast reportedly acquired Defined Technologies, a subsidiary of MicroTech, that will put the company in better position to secure connectivity and communications deals with federal government agencies. Defined Technologies, a MicroTech unit that handles the company's government-focused Enterprise Infrastructure Solution (EIS) contracts, will also become part of Comcast Business, according to Washington Technology.

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— Jeff Baumgartner, Senior Editor, Light Reading

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