Cisco to buy telecommunications software company BroadSoft for ~$1.9B to expand further into software and cloud services
Cisco Systems Inc. agreed to buy BroadSoft Inc. for about $1.9 billion to expand further into software and cloud services. — Cisco will pay $55 a share in cash …
Context & Ripple Effects
The BroadSoft deal is the third step in a deliberate sequence: Cisco paid $260M for cloud management startup CliQr in 2016, then outbid the public markets for AppDynamics days before its IPO in January 2017. Buying BroadSoft for ~$1.9B at $55 a share in cash extends that playbook from management tooling into carrier-grade telecommunications software.
What makes this arc notable is how durable it proved: the same strategy later produced the ~$1B ThousandEyes purchase, the optical-acquisition of Acacia, and ultimately the ~$28B Splunk deal — each one larger, all aimed at recurring software revenue layered on Cisco's installed hardware base.
First-order effects
- BroadSoft shareholders receive $55 per share in cash and the company's run as an independent listed telecom software vendor ends inside Cisco's collaboration portfolio.
- Cisco immediately adds a subscription-capable communications software business, advancing its stated pivot from box sales toward software and cloud services revenue.
Second-order effects
- Rival telecom and collaboration software vendors now compete against Cisco's global channel with a buyer that can bundle their category into existing network contracts, pressuring standalone pricing.
- Broadcom's $18.9B cash purchase of CA Technologies months later shows the template spreading: diversified hardware-and-infrastructure players paying up for established software franchises rather than building them.
Third-order effects
- If the pattern holds, networking incumbents systematically absorb specialist software firms — moving industry value from equipment margins to recurring subscriptions and shrinking the pool of independent mid-cap software targets.
- Each successive deal normalizes large premiums for strategic buyers over public-market valuations, reshaping exit expectations for enterprise software companies considering an IPO versus a sale.
The trend: Networking hardware giants are converting themselves into software and subscription businesses through a decade-long cadence of acquisitions, with Cisco's deals scaling from hundreds of millions to tens of billions.