As expected, the communications market has been going through a period of consolidation after another wave of innovation created more saturation than a competitive market can sustain. Add the fact that it’s often simply easier to build than buy, especially in a competitive market, communications, and you have the makings for a buying frenzy.
There are two big reasons to acquire, both are growth related of course – buying an outright competitor to increase your market share and reduce the competitive landscape, or acquiring complementary technology to deliver greater value in your service offering and gain a customer base without having to go through the R&D process.
When equity firm StoneCalibre aquired AVST and merged it with XMedius Solutions last year to deliver a much more complete communications and data solution set to the two companies’ combined customer base. The key, regardless of how complementary two portfolios may be, is getting the transition right, which is what the groups have been focused on since the October deal. Stephane Vidal, vice president of marketing and communications at XMedius believes that, while it’s taking time, the companies are on their way to a successful integration and is targeting the end of the year for a complete branding transition.
AVST CTO Tom Minifie adds that the two companies had been working together for more than two years, having been introduced by StoneCalibre, giving all three parties a chance to see exactly how well the two businesses could complement each other.
“It’s a great fit,” says Minifie. “We are one company now, but we’re not changing things for the sake of change.”
It’s a strategy that makes sense, given the combination of complementary product portfolios and non-overlapping customer bases. In fact, the combination brings together two organizations that have traditionally served to major customer and channel markets – XMedius on the Cisco side and AVST on the Avaya side. Combining the two creates a formidable force that can serve a significant share of the market.
“This was really a merger of equals with similar corporate values,” explains Vidal. “Customer Service is the key, respecting both partners and customer and being committed to product quality. AVST does that on the voice side and we do the same on the data side.”
So, 2018 continues to be a year of integration from all sides, including sales and marketing, service and support, R&D. Even when it comes to traditional technologies, like fax, Vidal says that’s still a big part of their plan, and points to several major deals in the works in the healthcare space, one of several industries that still rely heavily on secure fax transmission.
What most don’t realize that today’s fax is not the paper roll painful transmission sounds of old. Rather, Vidal says “fax can be sexy.” He points to the interactive nature XMedius has created with its fax solution, which, for instance, allows faxes to come in via any device by delivering an email link. Clicking the link opens a secure connection that allows viewing, signing, and returning the fax as needed, and the link expires in a predetermined time frame, eliminating security risks. Because fax is so heavily still used for compliance purposes, the system provides an audit report for the document exchange, tracking delivery, receipt, and return. It’s certainly not part of every business operation, but for the countless businesses that still require secure signature transmission, this is a welcome replacement for having to walk to the fax machine down the hall to wait for sheets of paper.
While 2018 may not be a groundbreaking new product period for XMedius and AVST, there are certainly growth opportunities beyond simply up- and cross-selling the combined customer base.
For instance, Minifie notes that the product set is well-suited for helping customers with GDPR compliance, as the May deadline for compliance approaches.
“Our solutions help businesses comply with GDPR and we are leveraging that not only in Europe, but also in the US where there are many customers that will be impacted,” he says. “Anyone that has information about partners or customers in Europe needs to comply, but most US businesses are not prepared.”
Then there’s the cloud story, specifically in the SMB market, which is rapidly adopting cloud solutions. The enterprise, thought growing as a market, isn’t quite as quick to make the move, largely because the migration process is significantly more time consuming and resource intensive. Enterprises will continue to adopt cloud on a service by service or department by department basis for the time being.
Vidal agrees on the opportunity: “Although our cloud business is much smaller, it is growing much faster than our more traditional businesses – We are really starting to see it now because people are adopting a new and different business lifestyle.”
XMedius operates three cloud data centers – one in the US, one in Canada, and one in Europe. This not only helps grow its cloud business, but supports Minifie’s declaration that the company can help support customers’ GDPR compliance needs.
Mergers are tricky and often, companies rush the process. That doesn’t seem to be the case here, as both brands are still operational, though technically under one flag. The fact they have two years of collaboration under their belts before the acquisition seems to have provided solid footing for the process.
Edited by
Maurice Nagle
