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Vonage Moves to Expand Into Unified Communications

Vonage Moves to Expand Into Unified Communications

We all have heard of Vonage, primarily through the commercials we see on TV during prime time.  But, do you really know what this company is all about? Vonage is a publicly held company that specializes in offering, to its customer base, enterprise grade level “Voice over Internet Protocol” (VoIP) services.  In other words, with VoIP, one can make telephone calls over the Internet at a very low cost.

Vonage is based out of Holmdel, NJ, and they currently have well over three million subscribers.  The name “Vonage” is actually a play on their corporate slogan, which is “Voice-Over-Net-AGE.”  Their current marketing campaign is “Crazy Generous.”  They boast annual revenues of almost $900 million, and net profits of $47 million.  Fueled by these numbers, it is no wonder that Vonage now has plans to enter into new markets.

One such market is that of “Unified Communications as a Service,” or UCaaS, for short.  At the 2015 Citi Global Internet, Media, and Telecommunications Conference, CEO Alan Masarek announced their strategic plans.  A major component of their plans is to target those small to medium sized businesses that possess a traditional PBX phone system, and replace that with a cloud based, telephony service.

There are two primary reasons why a business would want to migrate to the cloud for their phone services:  1) The lack of physical space to add more telephone lines, and 2) The need to add richer functionalities, such as one number dialing for employees.  According to the leading market research firm Frost & Sullivan, these cloud based solutions are expected to increase from $3 billion in 2015 all the way to $10 billion by 2020.

Just recently, Vonage acquired two VoIP based carriers, Vocalocity and Telesphere.  They both bring valuable assets to Vonage.  The former brings a proprietary networking technology which will prove advantageous as Vonage starts to offer these cloud based services. The latter brings a private “Multiprotocol Label Switching” (MPLS) network which utilizes and leverages a large communications platform.

CEO Masarek sums it up best, “We’re generally taking share from the on-premise PBX . . . What you see is about a 40 percent reduction in operating costs with no capex so rather than having to go and buy another key system, you move all of that to the cloud.”  (SOURCE:

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Valerie Stephen