by Jim Lundy
Recently, contact center solutions provider Serenova announced its merger with Lifesize, a video conferencing vendor. The merger is backed by Marlin Equity Partners, a private equity firm. With the deal, Serenova pivots from its core contact center offering to provide a fuller communication and collaboration product. In this blog, we examine the merger in more detail and offer an analysis of what it may mean for the unified communications and collaboration market.
Why Serenova and Lifesize: CC and UCC
While many providers start with voice as their core offering for UCC, Serenova has decided to start with video meetings through its Lifesize acquisition. By acquiring new video capabilities, Serenova is starting with video meetings in its desire to build out a UCC portfolio.
In today’s market, buyers want to deal with fewer vendors. For this reason, one of the trends in communication and collaboration is that contact centers (CC) and unified communication and collaboration (UCC) products are coming closer together. Vendors that can address a broader set of needs with their collaboration offering are well-positioned to take advantage of this trend.
The Austin, Texas Angle
Serenova is a provider of cloud contact center software based in Austin, Texas. Lifesize, also based in Austin, offers high-definition video conferencing technology and several other cloud-based video collaboration products.
Part of the reason for this merger is that Serenova and Lifesize are both Austin-based companies, so there was immediate synergy on location. Also, both companies possess complementary product offerings that customers are looking to get in a complete package. In this merger, combining the two companies is easier because they are both based in Austin.
Who Is Marlin?
Marlin Equity Partners is a California-based investment firm that is highly active in the technology and software sectors. Marlin has a long history of investments, and this is not the first time it has worked with Serenova. Last year, Marlin supervised Serenova’s acquisition of the ProScheduler platform from Loxysoft. This workforce optimization technology helped expand Serenova’s portfolio to include more of the employee management tools that customers look for in contact center providers.
Marlin’s role here shows how private equity has been making a bigger play to own more of the growing UCC market. Elliott Management Corporation is another firm that has been pursuing a similar strategy (e.g., Poly and Mitel). Now Marlin is making its play. Clearly, private equity sees there is money to be made, and this represents a trend in itself: private equity is now trying to monetize the UCC category, a role that has in the past been filled by venture capital.
Marlin suggested that the newly combined firm would pursue additional unified communication services acquisitions, suggesting that this trend is likely only to accelerate.
Serenova’s merger with Lifesize will bring their product closer to a complete UCC offering.
What Will Serenova Need to Do to Compete?
Besides video meetings, the other parts of the UCC stack include voice PBX, which is also called UCaaS, and team collaboration. Marlin will need to invest more to make the UCC stack come together for Serenova.
One area Serenova may consider when expanding its offering to deliver a full product is artificial intelligence (AI). Enterprises are rapidly adopting AI across all categories, and UCC is no exception. Just last year, Cisco bought Voicea, and Vonage bought Overture. We expect that more deals like this will happen.
Aragon believes many unified communications platform providers will soon offer conversational AI in the form of a digital assistant to automate collaboration engagement. As we recently discussed in a blog about the intelligent contact center market, there are a number of ways that advancements in artificial intelligence can streamline the collaboration experience for contact centers and other workplaces. AI could be one of the ways for Serenova to innovate faster than others.
Learning from Vonage
What Serenova needs to do moving forward is similar to what Vonage has been doing in the past five years since bringing on CEO Alan Masarek. Since then, Vonage has acquired a slew of companies to rebuild its complete portfolio. To succeed in the UCC market, Serenova will need to do the same.
Last year, in our Aragon Research Globe for Unified Communications and Collaboration, we predicted that by 2025, team collaboration will be the primary way people collaborate and communicate inside of a company. For it to be effective, UCC must be real-time; this means seamless, easy-to-use video conferencing and telephony solutions will be highly sought after.
In the same research note, we recognized that while voice-led product offerings have historically been at the center of unified communications, buyers want more than voice. It has been shown that there is a significant productivity gain if meetings are carried out through video conferences as opposed to through voice alone.
Bottom Line
We expect to see more plays similar to what Serenova and Vonage have been doing. These deals will open the door for new opportunities for best-of-breed UCaaS and team collaboration providers to be acquired, a process we expect private equity to take more of a role in. Enterprises will need to ask providers about their roadmap towards becoming a complete UCC offering before deciding on a product.