Amazon Vonage Acquisition on the Horizon?

By Doug Mohney March 30, 2017

Amazon continues to roll the unified communications (UC) community. This week, it added call center services to its virtual offerings through Amazon Web Services (AWS).  Combine with the February introduction of Amazon Chime – an offering for conducting virtual meetings – it is clear the company is building out a portfolio of business services.   At some point, stock public switched phone services (PSTN) should be added in to support "legacy" users and systems, so acquisition of a voice provider such as Vonage provides both a business customer base and skilled personnel familiar with the ins and outs of VoIP.

Amazon Chime provides one-click audio and video meetings, including support for the usual laundry list of cloud UC services, including hosting a meeting, chat, and the ability to share content and screens across desktops, Apple IoS, and Android clients.  Plenty of independents have offered UC services in this fashion before, so Amazon is less a trend setter than joining the status quo. But with AWS and the Amazon marketing engine behind it, Amazon Chime is a big party guest that can't be ignored.

Among the first resellers/companies offering Amazon Chime are Level 3 and Vonage.  Level 3 will launch Chime in the second quarter of 2017 as a part of its suite of UC and collaboration solutions.  Vonage is offering Amazon Chime Pro Edition to its business customers at no additional cost, rolling it in with its existing UC solutions.  The Pro version normally costs $15 per user per month, and includes meetings with screen sharing and video for up to 100 users.

                   Image via Bigstock

So what is Vonage doing for Amazon that its customers get Chime Pro for free, hmmm?

Amazon and Vonage may be working together as part of a trial "marriage."  If Amazon likes what it sees, it may move to acquire Vonage, getting a combination of consumer and business customers, Vonage's worldwide PSTN to VoIP network, and all the skilled VoIP people on Vonage's payroll.

Why would this make sense? There's been a lot of talk about Alexa gaining the ability to seamlessly make phone calls. Vonage has been in the VoIP service business pretty much since day one as a consumer-facing entity, so splicing its network with Amazon's would make a lot of sense to enable Alexa to make and receive phone calls from the PSTN network.  Vonage customers (and its support staff) might welcome the idea of retiring all the consumer PSTN gear, swapping out phone adopters for a nice shiny Amazon Echo while keeping their same phone plans. 

On the business side, Amazon and Vonage would presumably benefit from economies of scale in negotiating network and consumer long distance rates, enabling existing Vonage customers to get the same service but at lower internal costs, increasing profits per customer.

And both companies are moving towards more lucrative business customers. Vonage has purchased several business VoIP service providers over the past 5 years while Amazon's addition of self-service Amazon Connect cloud-based contact center would seem to be an ideal complement/supplement to Vonage's existing suite of business services.  Again, Amazon is late to the cloud contact center market, but it is biggest customer at the party.  Combine Amazon marketing with Vonage business support staff to get a winning combination of increased business UC customers and add in AWS services  and Amazon's Lex AI speech recognition and natural language service to build a portfolio for SMBs to mid-market customers.  Amazon benefits because it can sell more AWS-based services to an established Vonage customer base.

Is it crazy? Consider Amazon bought Zappos and let it remain a stand-alone entity within its empire. Vonage could be the business UC face of Amazon in the future.




Edited by Maurice Nagle

Contributing Editor

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