Windstream Holdings Inc. today announced plans to buy cloud-based unified communications solutions provider Broadview Networks (News - Alert) Holdings Inc. for $227.5 million in cash. The deal is expected to close in the third quarter of this year.
Broadview sells its solutions, which are marketed under the OfficeSuite UC brand, to small and medium-sized businesses. Windstream (News - Alert) is a Fortune 500 company that provides a variety of communications and networking solutions including cloud services, managed services, security services, triple play offerings, and unified communications to consumers, businesses, enterprise organizations, and wholesale customers across the U.S.
In addition to gaining the Broadview solution, the acquisition will provide Windstream with Broadview’s experienced salesforce. Windstream expects to gain $30 million in annual operating synergies within two years as a result of the deal. The company says the deal will improve its balance sheet “by reducing leverage through realization of synergies and will be accretive to free cash flow in the first year.”
The deal follows by a year and a few months Windstream’s announcement that it would acquire EarthLink for $1.1 billion. At the time, the company said its goal was to create a service provider with a broader national reach, a more expansive product portfolio, and better economies of scale. These are just a couple of many communications service provider combinations we’ve seen in recent months.
I sat down with Joe Harding, executive vice president and chief marketing officer, and Olen Scott, vice president of channel partners at Windstream, yesterday in Las Vegas. There they talked about the company’s channel strategy and its big push around managed services and SD-WAN, as well as CaaS and UCaaS, and security services.
The channel represents 20 to 25 percent of Windstream’s business services revenues. Scott said Windstream is being “hyper aggressive” in its work with the channel. The company recently committed 200 people to its channel effort, 60 people at Windstream are dedicated to channel partner upselling, and that generated $500,000 to $600,000 last year just in commissions, added Scott, who recently joined the company.
Harding said the channel helps Windstream reach the underserved mid market. The needs of these customers, he added, are becoming increasingly complex, so it’s helpful for them to have trusted partners. Channel partners are also assisting Windstream in serving large enterprises with unique requirements related to their industry verticals, he added.
SD-WAN is an important part of Windstream’s channel offering. The company recently launched SD-WAN services for this community.
Windstream’s goal is to be a leader in SD-WAN by the end of the year. Scott said SD-WAN is simple, but is not a plug-and-play solution. Windstream, he said, has the expertise to make it work and optimize it for business customers. SD-WAN, he added, offers tremendous visibility, but the question is what to do with that information.
“It’s actionable data if you know what to do with it,” he said, adding Windstream can help channel partners and their customers figure that out.
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