Ericsson recently announced it completed its acquisition of cloud communications provider Vonage. The transaction supports Ericsson’s strategy to leverage technology leadership as it grows its mobile network business and expands into the enterprise. Acquiring Vonage provides Ericsson with access to powerful building blocks to offer a full suite of communications solutions including, Communications Platform as a Service (CPaaS), Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS).
With Vonage’s CPaaS offering, Ericsson will look to transform the way advanced 5G network capabilities are exposed, consumed and paid for. This will provide the global developer community, including Vonage’s more than 1 million registered developers, with easy access to 4G and 5G network capabilities via open Application Program Interfaces (APIs).
Meanwhile, communications service providers (CSPs), global network APIs – such as location and quality of service APIs – will provide new opportunities to expand their profit pools to monetize 5G network capabilities. For Ericsson, global APIs provide a new material growth opportunity. The existing market for communications APIs – such as video, voice and SMS – is growing at 30 percent annually and projected to reach $22 billion by 2025.
“We are excited to welcome Vonage as part of Ericsson,” said Ericsson President and CEO Börje Ekholm. “With Vonage’s suite of communications solutions – UCaaS, CCaaS and Communications APIs – Ericsson will further expand its offerings into the enterprise space. In the future, network capabilities will be consumed and paid for through open network APIs, creating the opportunity for unparalleled innovation. We are already seeing great progress with frontrunner CSPs, and we aim to launch the first 5G network APIs in the coming year.
New monetization opportunities
“By linking the network world with the global developer community, we’re creating a paradigm shift that will put the network at the center, allowing the CSPs a new monetization opportunity supporting increasing investments in high-performance networks.”
This acquisition will also give developer communities the chance to create applications for any device that benefits from being connected to 5G. Developers will be able to do so because they can now access network capabilities in open, intuitive, and programmable ways through global APIs.
These new and innovative consumer and enterprise applications will further drive the rollout of 5G and network capex, according to Ericsson.
Ericsson also plans to increase its research and development investments to accelerate Vonage’s UCaaS and CCaaS solutions. Offering these solutions to CSPs will allow Ericsson’s customers to sell through their own brands and accelerate growth. The company will also complement existing communications offerings to small and medium sized companies with the Vonage UCaaS and CCaaS solutions, which will create a strong part of Ericsson’s offerings to both CSPs and enterprises.
Vonage serves more than 120,000 business customers, has a global community of more than 1 million registered developers and a highly scaled platform with a combined 25 billion messages and minutes per year. This, combined with Ericsson’s deep network expertise, industry-leading portfolio and global scale, is expected to enable Ericsson to seed and accelerate the market for global network APIs. CSPs will benefit from global reach, beyond national or regional setups.
“Vonage was born out of innovation and is today a global leader in business cloud communications,” Vonage CEO Rory Read said. “This partnership will strengthen our offerings to businesses across the globe by leveraging Ericsson’s leadership in 5G, global market presence and strong R&D capabilities. With the demand for UCaaS, CCaaS and Communications APIs growing rapidly, the combined expertise, talent and innovation is good news for our customers and partners.
“The way we work, shop, learn, see a doctor, exercise and entertain is fundamentally changing. Together, Ericsson and Vonage will be at the heart of the next wave of the digital transformation, providing enterprises, CSPs and end users with innovative applications and services that will change how business gets done.”
