In a comprehensive report titled, "The New Voice of Unified Communications," William Blair & Company analysts Dmitry Netis and Jason Ader initiated research coverage of BroadSoft, Inc. (BSFT $26.53) and ShoreTel, Inc. (SHOR $6.22) with Outperform ratings as well as Acme Packet, Inc. (APKT $26.58) with a Market Perform rating.
"We believe that we are on the cusp of a major disruption in how enterprises conduct daily business communications," Netis wrote. "This is being driven by the existence of disparate modes of communications (telephony, e-mail, document sharing, fax, chat, and conferencing), an explosion of communication devices in the enterprise (phones, PCs, smartphones, and tablets), and a swelling number of applications to leverage these discrete operating environments."
He added, "Unified communications and collaboration (UCC) technology consolidates these modes, devices, and services into a single integrated platform by adding intelligence and control, while improving productivity and lowering costs and communication boundaries. As more enterprises and service providers adopt UCC technology, we expect the $30 billion UCC market to reach $49 billion by 2015—a five-year compound annual growth rate (CAGR) of 13%."
"Of the publicly traded pure-plays in the UCC sector, we believe Acme Packet (session border controller) and BroadSoft (voice application server) are best positioned as a result of their broad, evolving product sets and ability to leverage IP network transformation," Netis wrote. "In addition, because of its product simplicity and ease-of-management value proposition, ShoreTel is well positioned to take share in the on-premise IP PBX market with a view toward leveraging the aforementioned UCC and mobility trends for cloud-based UCaaS."
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William Blair & Company, L.L.C. receives or seeks to receive compensation for investment banking services from Acme Packet, Inc., BroadSoft, Inc., and ShoreTel, Inc. Investors should consider this report as a single factor in making an investment decision.
William Blair & Company, L.L.C. is a market maker in the securities of Acme Packet, Inc., BroadSoft, Inc., and ShoreTel, Inc. and may have a long or short position.
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Current Ratings Distribution (as of 12/31/11)
Outperform (Buy): 59%
Market Perform (Hold): 33%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 8%
Market Perform (Hold): 1%
Underperform (Sell): 0%
* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.
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