Ericsson, a global networking company, has announced its plan to buy Vonage, a cloud-platform company based in the United States, for $6.2 billion. Ericsson is getting a more contemporary communications strategy with Vonage, which includes a cloud contact center, communications APIs, and a VoIP solution.
The move reflects Ericsson’s growing attempts to join the enterprise market, with the goal of enabling these clients to take use of new services in addition to the high speeds enabled by 5G networks. This merger, though, is not about 5G. Ericsson is concentrating on Vonage’s communications APIs, which it hopes will allow it to access a global network of developers working on 4G and 5G technologies.
Vonage is a cloud-based communications provider that allows clients to incorporate communications, such as voice, video, and messaging, into apps and products through its Vonage Communications Platform. Ericsson believes that Vonage’s cloud platform, which now serves about 120,000 commercial clients and one million developers, has significant potential to deliver value for enterprise customers.
Börje Ekholm, President and CEO of Ericsson, commented: “Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of 8 billion connected devices. Vonage’s strong developer ecosystem will get access to 4G and 5G network APIs, exposed in a simple and globally unified way. This will allow them to develop new innovative global offerings. Communication Service Providers will be able to better monetize their investments in network infrastructure by creating new API driven revenues. Finally, businesses will benefit from the 5G performance, impacting operational performance, and share in new value coming from applications on top of the network.”
The Vonage board of directors has already approved the transaction, which is now subject to regulatory and shareholder clearance. It is still expected to close in the first part of next year, according to Ericsson.