business mergers and acquisitions

Acquisitions in the Hosted VoIP Industry

Business Mergers Merger and Acquisitions

Why Bigger is Not Always Better
Bill Gates once said that “success is a lousy teacher because it seduces people into thinking that they can’t lose.” Well, to this we would add that success is sometimes not just a lousy teacher for people — it can also be a lousy teacher for companies, too.

Take for example the consolidation that is happening in the VoIP industry. A growing number of relatively small companies are being acquired by larger organizations. On the surface, this seems like a good thing. After all, bigger is supposed to be better, right? But if we take a closer look, we see that the exact opposite is the case! To understand this, we need to look at who is winning due to these acquisitions, and who is losing.

The Winners
The people who are laughing all the way to the bank are the CEOs and other equity stakeholders in these smaller VoIP firms because they are cashing in big time. Even if they stick around after the acquisition, they have MUCH less power and authority (regardless of what their flowery press releases say).

And of course, the leaders in the big enterprises are delighted, because they have instantly acquired a whole bunch of new customers, along with other assets (e.g. technological infrastructure, intellectual property, etc.).

The Losers
Who loses in the aftermath of these deals? There are two groups.

The first group is CUSTOMERS because the local service that they depended on for years is no longer available. To make matters worse, these customers are certainly not the most valuable or profitable in the enterprise — and so they are basically treated like “second class citizens.” It’s like going to a car dealership and being ignored by the salespeople because you want to buy one car, while the other customers want to buy multiple cars. You’ll be lucky if you get a chair and a cup of coffee!

The second group is EMPLOYEES who find that they no longer have jobs. According to research by Harvard Business Review, on average 30% of employees are “deemed redundant” after an acquisition. On a spreadsheet, this is just a number. In the real world, this is a real human being with a family to support.

How We Define and Drive Success
At Carolina Digital Phone, we have grown exponentially over the past two decades, and are proud to be a recognized leader in our industry. However, unlike some other established hosted VoIP companies, we have never sacrificed our fundamental commitment to providing the industry’s BEST LOCAL CUSTOMER SERVICE in order to grow. Nor have we ever had mass layoffs of any kind. On the contrary, we are currently hiring and expanding our footprint in North Carolina, South Carolina, and Virginia.

The Bottom Line
To us, success is not just about getting bigger. It is about staying true to our roots and never forgetting WHY we succeeded in the first place. At Carolina Digital Phone, we continue to thrive in an extremely competitive field because we provide our customers with unmatched service and support and because we personally care about every member of our growing team.

To us, success has not been a “lousy teacher.” It has been an effective advisor that keeps us focused on what truly matters: our customers and our people!

We invite you to contact us to experience the Carolina Digital Phone difference. Your consultation with us is free, and there is absolutely no obligation. We can connect with you in person or over the web at a time that is convenient for your team. Call us at (336) 544-4000 or chat with us during business hours by clicking the chat icon on the bottom of your screen. We are a local Greensboro, North Carolina-based business with over 100 5-star reviews!

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