Troubled Telephony Integrator Transcend Picked Up by FastechBy Ericka Chickowski | Print
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Known for IP telephony, network and video solutions, Transcend had been rumored to be on the brink of insolvency, one of many specialized VARs struggling to survive within a battered IP telephony market.
In a sign that could mark a shift toward greater stability in the IP telephony and networking market within the channel, Minneapolis, Minn.-based Transcend Communications announced that it will be acquired by Philadelphia, Pa.-based Fastech Investment Group at the end of the month.
A VAR and system integrator of IP telephony, network and video solutions, Transcend had previously been rumored to be on the brink of insolvency. The troubles made the company one of many specialized VARs struggling to survive within a battered IP telephony market. Late 2008 and early 2009 proved brutal for enterprise IP telephony. According to the Synergy Enterprise Voice Market Share Report, the United States IP telephony market sank 23 percent during the first quarter of the year.
"With the extended pause in enterprise telephony sales continuing, prospects and customers are assessing the economic effects on their budgets, postponing buying decisions, and waiting for global financial recovery and stability." Jeremy Duke, a Synergy analyst wrote in June.
Backed by the deep pockets of venture firm NewSpring Capital, Fastech plans to fold Transcend’s communications practice into its overarching IT services portfolio. "We are looking to capitalize on their strong market position, their experienced management team, and galvanized customer relationships," said Fastech CEO Rick Hirsh in a statement about the buy.
With more than 3.000 customers, Transcend had primarily focused on ShoreTel and Avaya system implementations in the Midwest. George Demou, Transcend CEO, said his firm signed the letter of agreement to be bought out because Fastech shared his vision of long-term expansion.
"Linking up with Fastech addresses our two key strategic goals," Demou said in a statement. "We were in search of a partner that would ensure our customers would receive the world class customer satisfaction that they have come to expect from Transcend. Beyond that, we wanted to join forces with a group that shares our vision for expanding our IT services scope and market reach.
"In spite of a troubled 2009, analysts expect the IP telephony and unified communications to perk up soon. In fact, a most recent Infonetics Research report found that it may already be experiencing recovery. Infonetics said that after dropping by 20 percent in two quarters, the North American PBX market grew by 12 percent last quarter. Pure IP PBX systems grew 6 percent and shipments of IP phones bumped up by 4 percent according to the Infonetics research released last week.
"We are finally seeing some signs of normalcy returning to the market," Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research. "The overall improvement in revenue is a welcome sign."