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April 17, 2015

Strategic Group Sounds Retreat, Looks to Divest VoIP Division


By Steve Anderson
Contributing TMCnet Writer

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Shift Networks is fairly well known in Canada's voice over Internet protocol (VoIP) market, thanks to its range of services for the small and medium-sized business (SMB) market in the region. But Shift Networks may not prove well-known so much longer as its parent company, Strategic Group, announced that Shift Networks was engaged in a merger with Broad-Connect Telecom Inc., effective as of April 15, 2015.


Shift Networks was well known for a national platform that allowed for a range of unified communications (UC) as well as telephony solutions. Merging with Broad-Connect Telecom, meanwhile, is a prospect that looks to add a little extra in IP telephony solutions, and give the newly-consolidated customer base a much greater value proposition. Perhaps the best news here is that no offices are expected to be closed as a result of the merger.

Strategic Group's CEO, Riaz Mamdani, noted that the merger was actually right in line with Strategic Groups overall purpose in creating value outside of commercial real estate, which is the core value Strategic Group focuses on. Strategic Group had reportedly been building Shift Networks for eight years before ultimately concluding the venture, as Mamdani noted.

Of course, when something like this happens, the first question is why. Though the reports didn't address much in the way of motivation, some possibilities emerge. The obvious one is that Strategic Group got a better offer and divested a company to get resources—innocuous enough, and the kind of thing that's routinely done. But there's another, darker possibility afoot that should be noted. Some have noted these days that the rise of certain real time communications tools, like Web-based real time communications (WebRTC) are putting pressure on the UC market, and may ultimately succeed it on several fronts.

If that does happen, especially on a wide scale, UC operations may have difficulty operating in future conditions, facing strong competition from real time communications. If Strategic Group agreed with that particular prospect, it might well have decided to cut bait before the fishing got too poor. That's strictly supposition, of course, and depends on the development of trends still potentially years away, but it's a point worth noting nonetheless. Meanwhile, it's possible that Broad-Connect Telecom also saw such development coming and decided to make a push on Shift Networks to strengthen its own position, helping it fend off the rise of real time communications with a better overall value proposition.

Only time will tell just what the case actually was, but this market is looking at a lot of change to come, one way or another. Being ready for those changes will go a long way toward protecting the life and health of firms in the field, and this particular move may well save some business as well.




Edited by Dominick Sorrentino
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