Mitel, Polycom merge to shore up against comms disruption

Flickr/Mike McCune

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There has been a wave of consolidation among companies that sell communications services as they shore up against smaller internet-based businesses such as Slack, Facebook, Skype, and Yammer, TechCrunch reports.

In the latest merger, Mitel, a global provider of enterprise and mobile communications, bought Polycom, which develops video, voice, content collaboration, and communication tech. The deal, which was valued at almost $2 billion, will increase both of the companies’ global reach. But it will also better position them to offer end-to-end communications services for enterprises. 

The acquisition comes amid a surge in popularity of internet-based communications systems. Internet-based collaboration companies, such as Slack, Facebook for Work, and Microsoft’s Yammer, can offer businesses less expensive user-friendly communication and collaboration solutions by leveraging the cloud. This is problematic for older companies like Mitel, which are still largely based on legacy networks.  

It’s likely that legacy communications companies will continue to merge fend of competitors. Two ways that these businesses can catch up is by either buying complementary companies, as in the case of Mitel and Polycom, or by investing in startups that offer a foot-up into the sector.

Earlier this year, two other companies, Cisco and IBM, made similar acquisitions, as they move into the cloud-based enterprise communications business. In February, Cisco bought Acano a team-collaboration startup similar to Yammer and Slack. IBM made two acquisitions in January and December, buying Ustream and Clearleap, two cloud-based video managing companies. 

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