Synacor has a large channel, for whom the addition of Qumu’s enterprise-grade video will significantly deepen their collaboration offerings.
Himesh Bhise, Synacor’s CEO
This week, Synacor announced a merger with Qumu, which will see Qumu and its enterprise video platform become part of Synacor. The company is stressing the value of the synergy of the Qumu platform with Synacor’s platforms, their Cloud ID Identity and Access Management platform, and their Zimbra Email and Collaboration platform. Synacor has been more focused on the midmarket, while Qumu concentrates on the enterprise, and the companies believe that Qumu’s video platform will complement Synacor channel partners’ well, and present significant new revenue opportunities.
“This helps us grow our collaboration story,” said Himesh Bhise, Synacor’s CEO. “We can take our Zimbra email and file contacts, with the Qumu enterprise video platform to deliver town halls, and tie those two elements with a variety of third party apps of companies like Slack and Zoom. That’s our story to the enterprise.”
Synacor’s core business has consisted of two segments – an advertising segment that works with ISV and web publishers to make them more money, and the software and services centre of the business, which includes email, and cloud ID and access management.
“Our Go-to-Market is a combination of direct sales to ISPs and content providers, but we are extremely committed to channels, with over 1900 partners who are certified to sell our product,” Bhise said. “Our channel partners serve about 3000 businesses today and 1000 government organizations throughout the world.”
Qumu’s channel is much newer.
“Qumu has been growing their channel presence,” Bhise said. “They have a handful of channel partners and have offered their platform to channel customers.”
Qumu’s channel is enterprise focused, while Synacor’s is more midmarket, but Bhise says coming together positions the channel well to expand in both directions, but with by far the greater volume coming through Synacor’s much larger channel in the midmarket.
“At Synacor, we work with 4000 businesses around the world, which tend to be midmarket and are reached mostly through channels,” he said. “Qumu has 175 customers who are concentrated in the Fortune 2000. That’s what is so complementary. We can take Synacor and Zimbra into the enterprise where Qumu has enterprise connections, and bring Qumu into the midmarket with our channel there.”
Bhise emphasized that while the sweet spots of the two companies have been different, Synacor’s technology is enterprise grade, and should sell well in that market.
“We have some large customers now,” he said. Zimbra is more popular in the midmarket but has many large customers, including government. There’s no product work required to bring the products together. The modern way of integration is all API driven, with each platform being built for extensibility. We will introduce Qumu’s capabilities into the Zimbra user experience, to take their users into a broadcast or a town hall meeting – or leverage APIs in a Qumu platform to deliver single sign-on between Qumu and a variety of enterprise applications.”
Both Bhise and Qumu CEO Vern Hanzlik, who will join Synacor as Chief Revenue Officer, Software & Services, stressed that the breakthrough of video in B2B environments made this the optimal time to combine.
“With collaboration companies, we felt video was an important part of the story,” Bhise said. “We had been looking at companies in that space. Things fell in place with Qumu at the right time. Vern [Hanzlik] and I have known each other for a few years and this was the right time.”
Vern Hanzlik, Qumu’s CEO
“Video is everywhere up and down the stack,” Hanzlik said. “The bigger businesses we serve have been in it for a while. It became mission critical to big business about 10 months ago. It wasn’t before.”
That video capability will be an enormous add for Synacor’s partners, Bhise emphasized.
“I spend a lot of time around the world talking with partners,” Bhise said. “They are motivated by seeing customers they serve be successful, and they want to present themselves as offering leading edge products, and ultimately, make more money. They will find that here is a platform in the enterprise video space which is high growth. This provides them with an opportunity to take that platform midmarket. They will find that deploying Qumu is similar to Zimbra. Learning will be minimal, and it means new revenue opportunities.”
The merger is expected to close in mid-2020. At that point, the combined company is expected to have over $120 million in annual revenue on a pro forma basis. This will include an estimated $70 million in software revenue, about 70% of which is recurring, and approximately $50 million in revenues from Synacor’s portal and advertising business.
