8×8 In Play. Or Are They?

Yesterday the news broke that telecom company, 8×8, the company previously known as Packet 8, was in talks to be bought by a “strategic buyer.” That of course led to other reports about the possible sale.

Looking at this from years of being involved in VoIP and having previously represented them, 8×8 could be seen as an attractive acquisition for the right buyer.

Last year Vonage was snapped up by Ericsson and now we’re starting to see how Big E wants to apply the Vonage tech stack to 5G mobile. (Translation-the value of Vonage was really in Nexmo’s API based business that Vonage acquired than in the telecom voice services.) That would lead one to think that Nokia, a direct competitor to Ericsson would potentially be a worthwhile suitor.

Another strategic suitor could be rival Dialpad (I’m a Dialpad shareholder) which would accomplish two things. First they take a semi-competitor off the board, immediately picking up a customer base which would benefit by Dialpad’s far superior platform, AI technology, conferencing service and smart call center services, and second, with T-Mobile a strategic investor, gives a broader business/enterprise play for T-Mobile to be able to offer with an already installed small business and mid-market customer base. 

There’s also the patent portfolio that 8×8 has, some of which date back to the earliest days of VoIP. Some of those would be interesting to a suitor, as they likely will find that there are some strategic benefits in owning some of them. 

I mention Dialpad as some of their recent job postings have referenced “public company experience.” especially in the PR openings. For a private company to want to hire people with public company experience, that usually signals one of two things. Either they plan an IPO or they plan on taking over a public company.

After those two, there are roll-up companies out there picking up telecom companies, and that hasn’t stopped. But to buy 8×8 there needs to be strategic fit, and outside of Dialpad, RingCentral and perhaps Comcast Business or Momentum Telecom, there needs to be deep pocket money behind it, and a management team ready to run a publicly traded business, or be capable of taking it private. That on the surface points to Ring Central, Dialpad, Comcast or Nokia, in my book as potential strategic suitors. There are also foreign telecoms, like Dimension Data (owned by Docomo), SingTel, Telstra, BT, France Telecom, Telefonica Tata or Reliance, but I see them more as dark horses and less likely. One other thought is Amazon-which has been dabbling in telecom and has a team capable of understanding VoIP.

There’s are also CPaaS players like Sinch (which is having their own set of issues), Bandwidth and Infobip that come to mind that also can’t be discounted.  They have the cash and have all expressed a desire to be more aggressive, Lastly, would be CloudFlare, with deep pockets and an expansionist mindset, but I think it’s too far off the track.

But this is all conjecture, and like all deals being talked about, it could be nothing, it could be conjecture, wishful thinking or end up coming to be.

Time will tell. 

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