Paul Ruppert, President, Global Point View Ltd, shares an overview of the discussion held in a recent MEF webinar, “Mergers & Acquisitions in Messaging & CPaaS”, where a panel of industry insiders explored the recent trends observed across the mobile tech ecosystem.
Has messaging gone from “bleak”- a low margin, commoditized category – to “Chic” because of new CPaaS combined capabilities driving valuations? Should CEOs look to build margin, customer distribution, and a platform orientation to choose between being “bait or predator” at this stage of the market?
MEF convened a panel of seasoned players comprised of leading consultants, advisors, bankers and experienced CEOs to discuss the present M&A arena.
‘Programmable’ capabilities required in the customer care or CRM customer experience space are becoming key elements of expanding and enhancing messaging, extending to all capabilities in telecommunications and customer engagement.”
- Alan Masarek, former CEO Vonage
- Lawrence Askowitz, Managing Director, Bank Street Group
- Gregor Eichler, TMT Consultant, Altman Solon
- Josh Rochlin, GM, Corporate Development, LiveVox
- Paul Ruppert, President, Global Point View Ltd.
Wherever you’re starting from, convergence is occurring
Whether your Salesforce.com picking up voice capability, or part of a transport focused firm looking to focus more on developers, channel factors towards valuation are crossing over.
Targeting where M&A will be taking place depends upon where you sit. But in all cases, it’s about picking up the connectivity regardless of communications modality, securing programmable capabilities as a solution, while being smarter about M&A conditions. From applications to delivery, opportunities abound.
Why is broad based capacity across messaging, voice, applications, and video becoming hot capabilities in the messaging space?
“Programmable” capabilities required in the customer care or CRM (Customer Relations Management) customer experience space are becoming key elements of expanding and enhancing messaging, extending to all capabilities in telecommunications and customer engagement.
Interfacing with customer care and shaping customer experience is becoming a crucial capability for mobile engagement companies.
Hence the M&A market is chasing comparables of Twilio, Vonage, 8×8, Five 9, and others looking to mirror them, and broadening engagement capabilities across all platforms–not just messaging.
What are Enterprises seeking in CPaaS offerings and how could that effect your acquisition posture?
In-app solutions are the framing consideration for enterprises. They seek platform capabilities combining ALL capabilities from least expensive and most effective to whatever the needs of the customer are at a premium value. Whether transport layer, or smart integrator of platforms, the enterprise customers are wanting more than “Transport. Report. Repeat.”
2021 Theme: Consolidation Rules
Not all from the transport layer with “connectivity tissue” possess the same value. For the smaller players, futures will be based beyond just reach and delivery quality. In this environment, private equity buyers are also primed to exploit opportunities where they can buy low, improve, enhance, and sell high. If you’re a smaller player the business requires global scale; movement is starting and a wave of consolidation will occur to capture that scale, and drive value.
CEO Strategic Takeaway: There’s still opportunities to “think wide” and “go deep” while simultaneously growing your business. Be objective with the strategic poker hand you hold. Know your market well to assess whether you want to be a buyer or seller of value. We’re early in the game. Decide which side of the transaction you want to be on. But don’t delay conversations in the C Suite and Board Rooms. You now need to begin thinking about what to do next. In the last six months, there’s been the equivalent of the past six years of M&A activity, so start fast.
Thanks to all the participants for their time and perspective on this insightful and interesting topic.