Cisco systems, one of the giants in the world of IT, has announced that it is buying Broadsoft Inc for $1.9 million in cash. This translates to about $55 per share for Broadsoft’s investors, thereby marking an almost two percent increase over the closing price of Broadsoft’s shares on Friday.

Broadsoft is based in Gaithersburg, Maryland and it specializes in providing telecommunication services like phone, audio, video conferencing, and virtual meeting rooms. This company’s primary focus is on small and medium customers who can’t afford an overhaul of their existing infrastructure. This niche area of small and medium business is one of the reasons for Cisco’s acquisition.

In addition, Broadsoft has many software tools that are used by large cable and telecommunication providers, and Cisco believes these tools will come handy as it expands to cater to a network-intensive world.

Cisco, based in San Jose California, is changing its strategy to meet the new needs of its business environment. According to the company’s spokesperson, more businesses want to have a complete contact center that they can deploy in the cloud. Though Cisco is ready for this change, it still makes sense to have collaboration tools from smaller companies like Broadsoft.

This move also signals a push away from its traditional switching and routing business. In fact, this move can give Cisco access to small and medium-sized business markets that need an integrated mobile, video, voice and other forms of communication.

To top it, most of Cisco’s products such as WebEx are based on premises, which means, they have to be installed manually. On the other hand, Broadsoft’s products are cloud-based, so Cisco can make the most of them without going through the cycle of development.

For all these reasons, it’s a good move by Cisco and it got a big thumbs up from its investors right away, as the share prices rose by one percent.

This deal is expected to close in the first quarter of 2018, after which broadsoft’s employees will be a part of Cisco’s unified communications technology group.

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