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Vonage Claims Stake in SMB VoIP Via Acquisition of Vocalocity

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Vonage has announced it will acquire Vocalocity, a cloud-based telecom, to try to gain more small to midsized business market share. Vocalocity is based in Atlanta and specializes in VoIP phone systems for smaller businesses. The company also provides data analytics, data mining and call monitoring products.

Although Vonage has had tremendous success in the consumer VoIP market, it hasn’t yet made inroads with businesses. The company saw Vocalocity’s fast growth of VoIP adoption among SMBs and felt that its offerings would fit well with Vonage’s goals. Marc Lefar, CEO for Vonage offered this statement:

‘Entry into the SMB segment is a key element of the growth strategy we outlined last year. Vocalocity accelerates our entry with a comprehensive, high-quality product suite and scalable platform. In addition, Vocalocity's software orientation, customer focus and innovative approach are a natural fit with our culture.’

According to CRN, Vocalocity’s service is different from other telecom products (e.g., Cisco’s Unified Communications) in that it is a virtual PBX service. Like Vonage, Vocalocity offers “fixed” VoIP services, which according to CRN, is “a market expected to grow 10 percent in the U.S. between 2012 and 2016.”

CRN also shares a quote from Vonage to its resellers:

‘Vonage has always been able to provide phone service for small office and home office customers who need one or two phone lines for their business. With the addition of Vocalocity, the company will also be able to provide phone service for small and medium size business customers who need more than two lines.’

The article goes on to say that Vonage believes the North American voice service market for SMBs is valued at around $15 billion. The acquisition of Vocalocity should go far in helping Vonage realize a large chunk of this market share.

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