Today we received confirmation that Microsoft’s acquisition of Metaswitch is complete – just over two months after the preliminary announcement.
At the time the pending deal was first announced there were a lot of questions about what it might mean – and to be honest most of those questions remain unanswered. I’ve given my opinion on the key questions below – and shared some new industry analysis – but fundamentally things are still pretty unclear.
What was the price?
Microsoft filed a financial disclosure reporting that they had issued $270M in additional stock which formed a portion of the purchase price for Metaswitch. So the purchase price is more than $270M, but that’s all that has been shared publicly.
Will Microsoft continue to support Metaswitch’s wireline products?
Probably. Neither the original announcement nor today’s one line update explicitly mentioned Metaswitch’s wireline products, but everything we’ve heard over the past two months suggests that it’s “business as usual” within the traditional carrier business. It would be nice to hear a formal commitment from Microsoft, but hopefully that’s coming soon.
Can we expect an integration between Metaswitch’s UCaaS features and Microsoft Teams?
Perhaps? Although the acquisition seems to have been driven by a desire for 5G technology and expertise, Cavell wrote a fascinating analysis about why it would make just as much sense for the acquisition to have been driven by a Teams integration.
The simplest change here would simply be for MaX Meeting (which uses Zoom) to be replaced by Teams – but there’s potential for a much deeper integration whereby Teams uses Metaswitch CFS+EAS for its Phone System component, and thereby makes it easy to integrate physical handsets from Poly, Mitel and others into a Teams business experience.
Will there by any changes in management?
Nothing has been announced. Obviously everyone at Metaswitch just got a whole host of additional layers of management above them – and it will be quite a culture shock to go from an organization of ~600 to an organization of ~150,000.
At lower levels of the organization I’m curious whether they’ll keep Metaswitch as a separate business unit for a little while, or whether Microsoft will quickly move to put UCaaS experts into their Teams department, while keeping 5G experts in the Azure group. Nothing has been announced.
Did we learn anything else about the product roadmap?
No. I imagine we’ll start to get updates from our friendly product managers in the coming months, but for now all hands are on deck integrating the Metaswitch organization into Microsoft.
Will Microsoft continue to support TDM-based media gateways?
We didn’t get any details today about the future road-map, but my personal opinion is that:
- Microsoft will continue to sell and support the ATCA based media gateway that Metaswitch have been selling these past few years – for some number of years into the future. And remember that historically there has been a period of about 7-8 years between an end-of-life announcement and the last day of support, so this will be around for some time to come.
- I find it very hard to imagine that Microsoft will develop a new generation of TDM media gateway. Their vision (and Metaswitch’s for that matter) has always been of a cloud-based future, and so at this stage all their investment will be in software-based VoIP networks.
Will all the Metaswitch employees in Enfield (London) be moving to Redmond?
No. In fact construction is well underway on a new headquarters building for Metaswitch about half a mile from their current location. Take a look at some photos here.
I own a Metaswitch platform: what should I do?
In the words of Douglas Adams: DON’T PANIC.
This is certainly a time of heightened uncertainty, but if you already have Metaswitch equipment running smoothly in your network then the best thing to do for now is to continue as you were.
To quote from Microsoft’s original press release:
We will continue to support on-premises, hybrid and multi-cloud models to create a more diverse telecom ecosystem and spur faster innovation, an expanded set of unique offerings spanning the complete communications core for voice and data, and greater opportunities for differentiation.
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Our intention over time is to create modern alternatives to network infrastructure, enabling operators to deliver existing and value-added services – with greater cost efficiency and lower capital investment than they’ve faced in the past.
Yousef Khalidi – Corporate VP, Azure Networking
If you have specific concerns, or would like us to take a look at your particular situation in more detail, don’t hesitate to contact us and we can set up a consultation call.
