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Jive acquisition takes LogMeIn into UCaaS midmarket

LogMeIn plans to acquire UCaaS provider Jive Communications for $357 million. The Jive acquisition, expected to close next quarter, will send LogMeIn into the UCaaS market.

LogMeIn intends to acquire Jive Communications -- a move that would thrust the online collaboration vendor into...

the unified communications-as-a-service market.

LogMeIn announced this week that it would pay $342 million in cash for Jive, and an additional $15 million if the company achieves specified milestones during the two years following the acquisition. LogMeIn expects to close the Jive acquisition in the second quarter.

Jive provides hosted voice over IP that matches many of the features of an on-premises PBX system, according to the company. Last year, Jive partnered with Cisco to offer its cloud-based voice services on Cisco's 7800 and 8800 multi-platform phones. The Cisco phones include firmware built for hosted call-control platforms like Jive's.

LogMeIn was primarily a remote access software provider until 2016 when it acquired Citrix's GoTo business for $1.8 billion. The GoTo products included GoToMeeting, which is cloud-based software for online meetings. The portfolio also included software for online webcasts.

How the Jive acquisition changes LogMeIn

With Jive, LogMeIn is in a position to embed UCaaS features into its online collaboration and video conferencing services. The overall portfolio would likely attract small and medium-sized enterprises, which are the targets of UCaaS vendors Fuze, RingCentral and 8x8.

LogMeIn believes the Jive acquisition will make it a strong competitor by creating a combined company with the "most comprehensive UCC [UC and collaboration] offerings in the market," LogMeIn CEO Bill Wagner said in a statement.

Midmarket enterprises are increasingly turning to UCaaS as a way to improve collaboration and communications between employees, partners and customers, according to Gartner. UCaaS providers with comprehensive communication services -- the apparent goal of LogMeIn -- are in the best position to differentiate themselves in the midmarket, which includes companies with 100 to 999 employees and $50 million to $1 billion in revenue, the research firm said.

Last year, midsize enterprises in North America spent nearly $1.5 billion on UCaaS, Gartner said. The market is expected to grow 19% annually through 2021 to $3 billion.

Jive was not in Gartner's September 2017 Magic Quadrant for UCaaS vendors. Gartner, however, did list the vendor as a "notable" player in the highly fragmented market.

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