Consolidation has emerged as a growing trend in the Unified Communications landscape over the last couple of years. As demands for excellent global interactions, collaboration, and connectivity have grown, vendors have begun to rely more heavily on partnerships, mergers, and acquisitions to serve their audience. 8×8’s decision to purchase Fuze is just one example of this.
Fuze is a leading cloud communications platform offering a portfolio of voice, instant messaging, video conferencing, and content sharing apps to its global audience. 8×8 is an innovative brand offering comprehensive packages of UC, mobile, video, and contact centre technology to companies of virtually every size. The natural synergies between the two brands make for an excellent, and potentially world-changing partnership.
Let’s take a closer look at what the convergence of Fuze and 8×8 means for the Unified Communications landscape as a whole.
Details of the Deal: the Fuze Acquisition
8×8 announced it was officially in the process of acquiring Fuze for a total of $250 million half-stock, and half-cash at the beginning of December 2021. Despite its excellent presence in the UC market, rumours have been floating around about Fuze’s search for a buyer for a number of years. Clearly, the company has been holding out for the right purchase, and it seems there’s something special about the connection between Fuze and 8×8 – particularly when you consider the purchasing price.
While $250 million is nothing to be sniffed at, Fuze did recently raise around $494 million in funding in January 2021, and it has a very significant customer base too. 8×8 is getting a fantastic deal, which includes access to around 250 R&D engineers, $130 million in revenue, and a rapidly growing presence in the enterprise market.
Of course, this is an excellent opportunity for Fuze too. An article published by CEO Brian Day on the Fuze website highlighted 8×8’s exceptional presence in the market, as well as the natural synergies between the two companies.
As Day noted, 8×8 and Fuze have both been invested in the development of the hybrid work model and the growth of cloud communications for some time now. Both brands also share a strong focus on customer experience, partner-centric go-to-market strategies, and cloud-based technology.
An acquisition from 8×8 also puts Fuze technology into the hands of a powerful name in the communication landscape. 8×8 was recently recognised as a Leader in the UCaaS Magic Quadrant for the tenth year in a row, making the company the longest-running leader in the sector. 8×8 are also the only UCaaS leader to also be recognised by the CCaaS MQ.
Boosting the 8×8 XCaaS Proposition
According to 8×8, however, the primary purpose of the acquisition is to accelerate the growth and value of the XCaaS solution – a combined Unified Communication and Contact Centre offering introduced earlier in 2021.
In a press release about the acquisition, Brian Day noted enterprise customers are increasingly recognising the value of an integrated UCaaS and CCaaS offering. The 8×8 industry-leading XCaaS solution is paving the way to a true single-pane-of-glass environment for business teams as they strive to enable the hybrid workforce, while delivering omnichannel-support for consumers.
For customers and partners of the newly combined 8×8 and Fuze company, the acquisition should deliver significant value. More resources and intelligence invested in to the XCaaS platform will pave the way to better combined communication packages for future customers, while giving partners more ways to go to market. 8×8 has already announced it will be committed to supporting Fuze customers via the Fuze platform as the product, engineering, services, and customer success teams are integrated. This should ensure the ecosystems of both Fuze and 8×8 remain strong and intact throughout the acquisition process.
Dave Sipes, the CEO of 8×8 further reassured channel partners that his company will be taking steps to ensure all of their investments and the investments of their customers are properly protected moving forward. Sipes went onto say this acquisition will provide partners with new revenue opportunities, in the form of an expanded solution portfolio, and complementary value-added services.
Notably, the purchase of Fuze will also mean positive things for 8×8’s global presence. Although the majority of the revenue from Fuze stems from US customers, the company has significant strength in Europe, throughout the UK and France. This European influence will be extremely beneficial to 8×8 as it continues to work on its worldwide footprint.
Leveraging Exceptional Opportunities for 8×8
Both 8×8 and Fuze have earned significant recognition over the years for their commitment to the unified communications industry. The combination of the two companies seems to be a natural step forward for both, paving the way for exciting new opportunities in a growing partner landscape.
As Dave Sipes noted in a press release about the purchase, the migration to cloud-based communications and engagement tools has accelerated significantly in recent years, particularly with the rapid transition to hybrid work. There’s a multi-billion-dollar opportunity in the industry today, and 8×8 is ready to take advantage with the help of the XCaaS platform.
The acquisition of Fuze will expand 8×8’s operational scale significantly and provide the company with additional scope to serve the growing demands of their global audience. The acquisition of Fuze also delivers significant benefits in the form of:
- Enterprise customers: 8×8 already has a strong number of enterprise customers in its consumer base – but the brand is keen to continue expanding. Although Fuze hasn’t always been the biggest name in the enterprise industry, it has been increasing it’s focus on bigger businesses in the last couple of years. Fuze has the potential to strengthen 8×8’s position as a brand capable of serving larger organisations.
- Revenue: The 12-month trailing revenue of Fuze was revealed to be around $120 million at the point of sale. When added to the average revenue of 8×8 of around $580 million, this pushes the company to an incredible over $700 million in revenue per year. Since one of the goals CEO Dave Sipes has mentioned in the past is to make 8×8 a billion-dollar company, this is a great step in the right direction.
- R&D: As mentioned above, R&D is a significant consideration for companies like 8×8 in today’s rapidly-evolving communications landscape. The acquisition of Fuze will add around 250 new R&D experts into the mix, giving 8×8 almost 1000 innovators in total. This should help a great deal with 8×8’s approach to transformative communications tools.
What’s Next for 8×8 and Fuze?
Clearly, 8×8 has made an intelligent decision with their choice to purchase Fuze. The two companies and their approach to communication technology blend perfectly. What’s more, this acquisition will give 8×8 the extra boost it needs to continue leveraging the momentum of a rapidly-growing industry.
Cloud communications, contact centres in the cloud, and the overall digital transformation of the business landscape have never been more relevant. 8×8 has long been on the cutting edge of the industry, shaping the future of business communications for countless brands. The acquisition of Fuze will simply take the company’s potential to the next level.
The transaction is expected to close during the fourth fiscal quarter for 8×8, provided regulatory approvals and customary closing conditions are satisfied. Once the purchase is officially “under wraps”, we’re sure to see some rapid innovation in the 8×8 XCaaS platform, and the technology the brand has to offer for the future of hybrid work.