Sangoma: Partners to Get More Market Opportunity via Star2Star

Sangoma partners have a lot to look forward to with the company’s $437 million acquisition of Star2Star.

That’s according to David Hardy, Sangoma’s vice president of North American sales. The merger will create a key rival for 8×8, RingCentral, Vonage and more.

The Sangoma-Star2Star merger follows a series of M&A transactions in cloud communications. That includes 12 CPaaS-related deals in 2020.

In a Q&A with Channel Partners, Hardy talks about what Sangoma partners can expect from the pairing.

Channel Partners: Tell us about Sangoma’s partner program. What types of partners do you work with?

Sangoma’s David Hardy

David Hardy: Sangoma has two different models that we go to market with, especially here in North America, and that is a two-tier distribution. We still sell a lot of on-premises PBX and products that go into communications such as gateways and SBCs, and such. And that generally flows through our distributors. So we have a network of distributors worldwide. And then we have resellers at different levels and with deal registration, so they’re protected as they develop business opportunities. It’s a well-oiled machine in that regard.

For cloud, we work with master agents. We work with the likes of Jenne as a master agent, which works great. And then also TCG, Sandler Partners, AppSmart, Nexus, the list goes on. So we’ve got a well-developed channel for both on-premises and cloud.

CP: What will acquiring Star2Star mean for Sangoma partners? Will this mean big opportunities for them? Can you give some examples?

DH: If we look at what Star2Star brings to the table, it basically provides a full spectrum of offerings. You can think
of it as a one-stop shop. So for all the communication needs and deployments such as on-premises, as well as pure cloud and a hybrid solution, that’s something that Star2Star definitely brings to the table. Also, from a segment size as well. Sangoma has done very well in the cloud space, in the small market and moving up into
the midsize. Star2Star has been very successful in the midsize market going up into the enterprise.

So it’s very complementary. As a matter of fact, as we looked at our win-loss data and looking at who we competed against, we rarely ran into Star2Star. So they’ve been very successful and we’ve been successful. So together, we’ll be able to cover the entire market from small to large accounts.

CP: With the two companies coming together, does that change your competition?

DH: It does. I think we’re going to keep some of the same competitors, but it does elevate us as a bigger
company. Now, with the two companies combined together, we’re in that echelon with the larger companies.

From a Sangoma perspective, we’ll be able to compete not in that smaller to midsize, but all of it into the very enterprise space as well. So we’ll run into the competition more and more in those spaces. We’ll be competing more
aggressively with the bigger competitors — definitely would be …

… Mitel, Vonage, RingCentral, 8×8, those types and even with the wholesale carrier space for SIP trunking against Bandwidth.

CP: How will this acquisition fit into Sangoma’s overall business and channel strategy?

DH: Both have well-developed reseller channels today. Sangoma has a very strong worldwide distribution network. It also has a very healthy OEM channel. Star2Star, on the other hand, has a very good MSP channel, and they also have a great strategic technology partnership, and a robust white-label offering as well. So with the two programs, with master agents, they’re complementary.

As a result, we’ve got very differentiated types of channel relative to our peers. So it goes back to that one-stop shop for all these different channels.

CP: What have you been hearing from partners about this acquisition?

DH: So far, it’s been very positive. This is the ninth acquisition with Sangoma. And so our partners are very excited about the portfolio expanding … to be able to go more upstream into the enterprise space. They’re excited about that.

We do have some partners that overlap, that sell both platforms. The Star2Star partners that I’ve talked to are really excited about having Star2Star using the Sangoma phones and gateways, and SBCs to have a real, true, end-to-end solution. So it’s been a very positive response so far.

CP: Will the two companies’ partner ecosystems and programs be consolidated? If so, what will be the process and timeline?

DH: The integration will happen in two steps, just based on on previous acquisitions. We’ll start with the staff functions like finance, our legal teams, those type of staff functions, and then get into the more line functions. That’s where we’ll need to meet together to look at engineering, sales and operations, marketing and network … and try to come up with a more unified strategy going forward. So I think it’s going to take some time. The deal was supposed to close early April and so it would probably be late this year.

You’ll start seeing the fruits of that of integration. But that’s something that will be top of mind. Sangoma has been through this many times before. So we know how to do it. It’s actually a great, fun process.

CP: With the acquisition in mind, can we expect to see changes in Sangoma’s partner program and channel strategy this year? If so, how?

DH: I think it’s too early to say at this point. And I think that we need to get together and see how we can
take these programs and put them together. It is something that we will do over time for sure.

The other thing is Star2Star is predominantly here in the United States. We want to take that platform and expand it to other regions around the world. And so not only talk about the channel here in the United States and Canada, but also what it means in …

… Europe and Asia, and other parts of the world.

CP: What impact has the pandemic had on Sangoma and its partners? How are their needs changing?

DH: Sangoma has been a UCaaS platform and a lot of our partners have been able to use the platform to help remote workers as a result of the shelter in place. Our partners have been extremely busy with their customers, making that transition and keeping the networks up, and in not only from small business, but medium business and local governments.

So it’s really not any particular vertical. It has affected all industries across the board, obviously. And so Sangoma has benefited from that push for the remote worker. And so it’s been good. But at the same time, it’s challenging since we have our own workers who are working from home and school, the kids were at home and they need attention as well. But I think we’ve made adjustments and been empathetic to the situation, and bonded even stronger as not only internally to Sangoma, but with our partners as well through video such as we’re doing today.

CP: Will this acquisition help Sangoma meet evolving needs associated with the post COVID-19 new normal?

DH: I think it will. And the reason being is, these companies are realizing that having people in the offices may not be as productive as working from home. So the idea of working from home is becoming more accepted.

And as a result, a lot of companies are realizing they can reduce their real estate footprint, and as a result, they
take that money into the company. So with Star2Star, it not only will it be able to do that with SMBs, but also with the enterprise companies as well. If somebody wants to live in the mountains of Colorado, for example, and they’ve got good internet, they can work remotely there just as well as they could in the office.

CP: With this acquisition, will 2021 be an especially big year for Sangoma?

DH: Yes. Our fiscal year started on July 1, 2020, and we’re continuing to grow organically, very quickly. We expect that this growth will continue with acquisition of Star2Star, as well as organically with our current products and channel partners.