Vonage and Ericsson Are Starting to Purr

With Ericsson’s powerful network, Vonage is making mobility its differentiator

Vonage and Ericsson Are Starting to Purr
Contact CentreNews Analysis

Published: March 17, 2023

Charlie Mitchell

Ericsson’s $6.2BN acquisition of Vonage was a long time in the making.

First announced in November 2021, Ericsson finally got the deal over the line in July last year.

Since, the networking giant has done little to talk up the acquisition.

Yet, its team has worked diligently in the background, and now the results are starting to show.

These center on Vonage’s CPaaS offering, which supports its CCaaS and UCaaS solutions.

Perhaps this is little surprise, as the CPaaS market is gathering significant momentum, valued at $7.13BN in 2020 and set to reach a value of $25.99BN by 2025 – according to Juniper Research.

Nevertheless, it has become crowded. Cisco, Twilio, and Avaya are already prominent players. Throw in AWS and Microsoft as relatively new entrants, and the space is thriving.

According to 2022 Omdia research, Vonage is currently a market leader. Yet, how does Ericsson plan to keep it there with this raft of new rivals and grasp the treasures of a growing market?

The answer: leveraging its wireless operator relationships that will allow Vonage to differentiate its tools through mobility.

Mobility as a Differentiator

Operator relationships are crucial to the performance of communications via over-the-top (OTT) smartphone applications – which leverage CPaaS to enable this communication.

Unfortunately, OTT apps often lack reliability. UCaaS applications are an excellent example of this – with employees sometimes struggling to communicate using their data while on the move.

Microsoft recently teamed up with Verizon to launch a Teams Mobile integration to overcome this issue. Elsewhere, Cisco partnered with AT&T to power a similar WebEx Go service.

These deals hinge on coordinating network contracts and dual-sims. Yet, Vonage seems to have a different proposition: managing the entire network experience to enhance the performance of OTT communications applications.

However, such an approach may improve communications beyond UCaaS. Users may send messages and make phone calls without leaving a customer app, giving the business more control over the conversation while enabling greater mobility.

Such mobility will extenuate the value of Vonage’s CPaaS tools – including its audio and video APIs, which businesses can build into their apps.

Last week, Vonage added AI-driven capabilities to these APIs, including live captions and transcriptions, background blur, and noise cancellation.

Yet, the GSMA’s new Open Gateway, backed by Ericsson and 20 other service providers, may enhance its proposition further.

By combining their power and harnessing the network capabilities previously hidden amongst all these providers, developers may enable richer communications.

Moreover, a powerful network could allow Vonage to experiment with new use enterprise communications use cases and deliver vertical-specific solutions.

Finally, it may solve issues within customer communications – such as the metaverse bandwidth problem.

Is It a Compelling Enough Differentiator?

Vonage sees significant potential in mobility as a differentiator, as the title of its upcoming session at Enterprise Connect suggests: “Tapping into mobility.”

During the session, Vonage promises to release further innovations. It also plans to discuss how 5G and the rise of its global network platform will allow businesses and consumers to bridge physical and virtual worlds.

The overarching question: is it a compelling enough differentiator?

Many people will be happy enough with the telephony within the apps that they use. Yet, there may well be value in specific verticals, and it will be fascinating to see what innovations Vonage comes up with next.



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