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Talko acquisition caps year of UC services consolidation

This past year saw a surge of mergers and acquisitions among UC services, most recently with Microsoft buying startup Talko. Experts think this trend will continue in 2016.

The past year has seen a wave of mergers and acquisitions in the unified communications space, and experts expect that trend to continue in 2016.

Most recently, Microsoft announced it is acquiring Boston-based startup Talko, a voice messaging company started by former Microsoft executive Ray Ozzie. A post on Talko's website said the voice collaboration technology would be wrapped into Skype and Skype for Business.

The move is further evidence of a maturing UC services market with larger vendors buying smaller companies to break into a new space or acquire technology that will augment an existing product.

For Microsoft, the technology Talko brings will help bolster mobile capabilities around team chat, something the software giant didn't yet have, according to Irwin Lazar, an analyst at Nemertes Research.

"Microsoft doesn't really have a good team chat solution other than Yammer, which is much more of a full-featured social platform,” Lazar said. “Persistent chat rooms are only available on on-prem installs of Skype for Business, and require a separate third-party client from MindLink for mobile."

Talko's technology will also give Skype for Business some modern upgrades, experts said.

"Skype for Business has not seen a great deal of innovation over the last few years, so if they are able to modernize it with features from Talko, it will provide Skype with a much-needed update," said Alan Lepofsky, an analyst with Constellation Research, based in Silicon Valley.

Acquisitions, such as the Microsoft-Talko deal, have become common this year, as larger UC services vendors seek out smaller companies to grow their portfolios inorganically.

Traditionally, acquisitions have been between two companies that were competitors. But in 2015 larger vendors were shopping for technology that would either give them access to a new vertical market or be easier to purchase rather than develop in-house, Lazar said.

UC services vendors search for the next popular product

"There's a scramble by the incumbent, larger UC vendors to buy into the next wave," Lazar said. The next wave of UC acquisitions will likely include API providers, cloud-based services and team collaboration apps.

Other notable acquisitions in 2015 included: Cisco's announcements to buy video conferencing company Acano and cloud API provider Tropo; IT services company Atos SE purchasing Unify; Avaya buying Esna; RingCentral's purchase of Glip; ThinkingPhones' acquisition of Fuze; and Mitel Networks Corp. buying mobile carrier Mavenir.

Mitel's purchase of Mavenir took about two years to complete and was the third acquisition for Mitel in 2015, according to company CEO Richard McBee, who said Mitel is expected to make more acquisitions next year.

"We're always looking at segments that are important to us and are strategic to us," McBee said.  

The number of mergers and acquisitions in the UC services space indicates the market is maturing, said Bern Elliot, an analyst with Gartner.

"In early stage, companies differentiate just by being there, and as the market matures they have to distinguish themselves by market reach and visibility," Elliot said.

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