In a $1.9 billion deal aimed at building its portfolio of cloud-based collaboration tools, Cisco announced today that it plans to acquire BroadSoft, a Maryland-based provider of unified communications software and services. It is the seventh acquisition announced so far this year by the networking technology giant, which earlier this month said it had reached its 200th acquisition.

As businesses increasingly move into the cloud, Cisco has been working to expand its capabilities from communications hardware into software and digital services. Founded in 1998, BroadSoft specializes in IP-based communications. its customers include 25 of the world's top 30 telecommunications service providers.

Expected to close in the first quarter of 2018, the BroadSoft acquisition "reinforces Cisco's commitment to unified communications and enhances its ability to address the millions of aging TDM [time-division multiplexing] lines poised to transition to IP technology and cloud native solutions over the coming years," Cisco said.

'Highly Complementary' Offerings

The addition of BroadSoft's offerings will help Cisco meet its goal of "delivering the next generation of collaboration experiences to all workers across every room, desk, pocket, and application," Rob Salvagno, Cisco's vice president of corporate development, said in a blog post today.

BroadSoft will not only bring Cisco a complementary line of software and services, but also a global network of partners that includes more than 450 telecom companies in 80 countries, Salvagno added. Together, those partners serve more than 19 million business subscribers around the world, he said.

The Cisco acquisition will help BroadSoft achieve its board of directors' goal to maximize shareholder value, BroadSoft president and CEO Michael Tessler said in a separate statement.

"BroadSoft's hosted offerings, sold through the service providers and aimed at small and medium businesses, are highly complementary to Cisco's on-premises and enterprise-centric HCS [hosted collaboration solution] offerings," Tessler said.

BroadSoft Unveils New Services, Products

Among BroadSoft's services are applications for cloud PBX (private branch exchange), unified communications, team collaboration, contact centers, and business app integration. Its flagship products include BroadWorks, an application platform hosted on-premises by service providers, and BroadCloud, its cloud-based platform for service providers "looking for an accelerated time-to-market with business ready services."

According to recent data from the analyst firm Gartner, on-premises-based telephony system shipments decreased by 5.2 percent in 2017, while cloud-based telephony licenses grew by 17.9 percent. The firm predicts that cloud-based telephony shipments will pass those for on-premises-based systems by 2020.

Until the acquisition closes next year, Cisco and BroadSoft will continue to operate as separate organizations. Afterward, BroadSoft's employees are expected to join Cisco's Unified Communications Technology Group.

Today's announcement was made as BroadSoft holds its 15th annual Connections users conference in Phoenix. At the event, the company unveiled a number of additional new developments, including new capabilities for secure, online team meetings, mobile calling, and partner-focused go-to-market services for digital campaigns, transformation, and sales.