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BroadSoft, Inc. (BSFT) Message Board

  • palawanislands palawanislands Oct 3, 2013 3:33 PM Flag

    Welcome to the era of cloud communications

    Welcome to the era of cloud communications

    In short, BroadSoft is the carriers’ arms supplier in their fight against Cisco and Microsoft. They don’t show up in traditional PBX market share stats because their solution is branded by the carriers. However, BSFT already accounts for about 5% of the market penetration in the cloud communications market (and growing fast).
    As the neutral arms supplier to the major carriers, BSFT is a favored partner. Because of this, they could easily double their market share over the coming few years.
    Ultimately, the overriding issue is “who owns the customer” — the carrier or the software provider? When the carrier uses Microsoft or Cisco software, the business interacts with the software brands: Lync, SharePoint, WebEx, etc. every day so it’s clear that Cisco and Microsoft have the business relationship not the carrier (i.e. Verizon or AT&T).
    However, in the case of Broadsoft, the carrier owns the customer and BroadSoft is happy to serve its role as the neutral arms supplier. BroadSoft software is branded as Verizon (VZ) or AT&T (T) or Comcast (CMCSA) — whoever the customer may be.

    So What Does it Mean for the Stock?

    The one thing I have tried to incorporate into every large position I take is a firm grasp of risk/reward. While most investors get the reward part down firmly, they ignore the risk part at their own peril. Risk for BSFT is they poorly execute a quarter and the stock gets hit, then what do you do? The beauty of BSFT is that it remains such an enviable acquisition candidate that buyers such as Oracle are salivating waiting for BSFT stock to correct so they can pounce and make a bid.
    If BSFT reports a light quarter and the stock sells off in one of the next 3 quarters, I would aggressively buy that weakness as M&A chatter will heat up immediately thereafter.
    Oracle acquired Acme Packet in February, followed by Tekelec in March. Acme Packet and BroadSoft were such great partners and such perfect complements that having

 
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20.51+0.39(+1.94%)Oct 20 4:00 PMEDT

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