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IDC predicts that the two companies will have an addressable market of nearly $28 billion by 2018.
Vonage has agreed to buy cloud specialist Nexmo for $230 million in cash and stock, in a deal that will see the U.S.-based IP telephony provider increase its position in the field of cloud communications.
Vonage said Nexmo, which was founded in 2011, is the world’s second-largest communications platform as a Service (CPaaS) company as measured by revenues. It provides communication APIs for text messaging and voice communications, allowing developers and enterprises to embed contextual communications into mobile apps, web sites and business workflows via text, social media, chat apps and voice.
Vonage CEO Alan Masarek said the company has been pursuing an ambition to become a market leader in the field of cloud communications for business since 2014.
“By combining Vonage’s rapidly growing unified communications as a service (UCaaS) business, with Nexmo, the second-largest player in CPaaS, we are creating the future of cloud communications. These companies represent a set of strategic, technology and human resources assets that deliver the broadest services offering in our industry,” was Masarek’s bold claim.
Upon closing, Tony Jamous, co-founder and CEO of Nexmo, is to join Vonage as president of Nexmo along with co-founder Eric Nadalin as CTO and Nexmo’s 170-person team.
According to IDC, Vonage and Nexmo will have a total addressable market of nearly $28 billion by 2018. The research company added that the CPaaS market is expected to be worth $8 billion by 2018, driven by the demand for communications within business apps and workflows, and the needs of new economy companies such as Uber, Alibaba and Snapchat, and traditional companies like KLM Airlines and Daimler.
