Ooma’s CEO Eric Stang discusses the implications of the deal with ChannelBuzz, including the likely impact on both the Ooma and Voxter solution provider channels.
Earlier this week, VoIP provider Ooma announced the signing of a definitive agreement to acquire Vancouver-based Voxter Communications, a provider of custom Unified Communications-as-service [UCaaS] solutions for midmarket and enterprise businesses. Terms of the deal, as well as Voxter’s revenue, were not disclosed. The transaction is expected to close this month.
“This is a very strategic acquisition for us,” said Eric Stang, Ooma’s CEO. Ooma has traditionally sold to consumers, and, with its Ooma Office offering, to the true small business market. The Voxter deal gives them the potential to expand on a much larger scale upmarket than they ever have before.
“Ooma Office does have some customers with more than 100 users, but its core market, and most of its customers, are in the 25 or less segment,” Stang said. “They are main street businesses, like doctors’ offices and local restaurants, who want a handful of lines, where they can get the capabilities of a full-featured business, while saving money, and without the need to run cabling.” Their legacy is direct sales, and most of their business is still direct, but two years ago they established an Ooma Office Partner Program, to support a reseller channel, so they do have a channel presence.
Voxter has been around well over a decade, since 2005. Their core business is also fully hosted VoIP solutions that are feature rich and highly customizable. They also offer other UCaaS offerings, like instant messaging, videoconferencing, contact centre capabilities, and integration with mobile devices. Their customers include higher profile ones like Slack, Optimizely, Whistler Blackcomb Ski Resort, Hyperwallet and Grafana.
“Voxter is a relatively small company that has spent years perfecting a great platform solution,” Stang indicated. “They have hundreds of customers, and some great customers who reflect that, who range from tens to hundreds of users. They sell both direct and through channel partners, and have made it very easy for partners to white label their platform and sell it however they like. They have been very well managed, and have grown without losing money, which has, however, also limited how fast they can grow.”
Stang said that while Voxter’s capability to move Ooma upmarket makes this an important acquisition for them, it wasn’t something they considered a critical necessary, and was an opportunity rather than a need.
“We didn’t feel that we had to move upmarket,” he said. “There were three drivers why this made sense for us. We were very impressed with the technology solution they built, and think there are elements from it that can improve our own Ooma Office. Secondly, we are excited to now have a base in Canada, with a very strong technical team. Third, this is an extremely good solution for larger sized businesses, with a very special company who is very good at what they do.”
Stang noted that Voxter isn’t better known because they haven’t spent a lot of money on sales and marketing in the past, and that is something that will change under Ooma.
“We will being more sales and marketing resources to Voxter, and improve their go-to-market,” he said. “Investing more there will drive more growth.”
In terms of branding and go-to-market strategy, Stang emphasized that Ooma and Voxter will be sold as separate offerings, not combined.
“The power of Ooma Office is that it is specifically designed for small businesses, and we think broadening it out to try to address more than that would harm it,” he said. “Voxter will continue to be branded as Voxter, although we will get the Ooma name in there somewhere, like ‘Voxter, an Ooma company’ or something like that. We haven’t decided on a specific name. However, Ooma has an 89 per cent Net Promoter score, which is an extremely high measure of customer satisfaction, so we think that adding the name Ooma to the Voxter brand will help give them more credibility.”
The actual technical integration is not expected to be difficult.
“We think it will be relatively simple because we aren’t trying to combine them into one product,” Stang said. “We will offer a full UcaaS solution for larger organizations, and a curated solution for small business. So it’s not a comprehensive integration – it’s stealing the best from each offering to make the other better.”
The channels of both Ooma and Voxter will have full access to the other solution.
“We want to make sure all of our channel partners have access to all the solutions we have,” Stang stressed. “Voxter channel partners will be in a position to sell Ooma Office to their smaller customers. Our Ooma partners will also be able to bring Voxter in where that makes sense for their customers.”
Both Voxter and Ooma require resellers to undergo training on the power of the solution as well as selling it, and Stang said that will also be required of partners who pick up the other product.
“Both companies already have their own programs, and we would want partners to go through that,” he said.
Ul;timately, Stang considers that the partners of both companies will benefit by being able to offer a broader range of solutions that are customized for specific market segments.
“We think we will be more attractive to channel partners because they can now cover all needs,” he said. “You can’t cover the whole market with one product. All-in-one doesn’t work in this market.”