West Corporation continues to pursue its transformation-through-acquisition strategy with a $120 million purchase of Smoothstone IP Communications. The Louisville, KY-based company was founded in 2000 under the name Teledvance. Over the years, it has grown a global footprint as a managed service provider for medium-sized businesses in the United States and Western Europe, including the UK, France, Germany, Belgium, the Czech Republic, Greece, and the Netherlands. West will fit Smoothstone, and its 120+ employees into its Unified Communications operations, where it has already built a formidable group of System Integration and Consultation resources, primarily through its SKT Business Solutions subsidiary.

The acquisition marks an acceleration of West’s mobile strategy. Smoothstone’s value proposition has evolved over the years. For much of the time it served as a single-point-of-contact for medium sized firms with multiple-sites and multiple vendors to work with as they migrate to IP-based platforms. The company lists both Cisco and Avaya as its strategic partners in the managed services channel. What has set it apart more recently is its relationship with Sprint, characterized as “a strategic alliance to bring mobile workers the functionality of a cloud-based PBX” over the carrier’s wireless broadband network.

Smoothstone extends its clients’ enhanced communications capabilities to mobile employees through its Mobile Connect product. Its downloadable apps for both iOS (Apple) and Android-based phones enable users to take advantage of the company’s PBX-like features, including access to the corporate directory, abbreviated dialing to other employees, long-distance and international calls at the corporate rate, voice mail and conferencing.

As noted above, West will continue to have two distinct lines of business for its multiple business units. Smoothstone joins the Unified Communciations group which houses Conferencing and outbound Alerts and Notifications, as well as System Integration and Consulting. For the record, West’s financial statements show that UC, for the first time, is more than half of the revenues of the parent company (exceeding $1.2 billion in revenue in 2010 – up 8%, compared to Communiations Services’ (CS) $1.17 billion in revenues and a 6% decline). More importantly, UC is proving to be more profitable than CS, with roughly 60% operating margins, compared to closer to 50% for CS. With the acquisition of Smoothstone the center of gravity for West Corporation is destined to move toward general managed IP-based services.

As for contact center and self-service businesses over in CS, everyone should take heart in the fact that, in the world of Conversational Communications, traditional contact center functions – customer acquisition, customer support, upsell/cross-sell, and all that – going enterprise-wide (and beyond). Conversations between and among employees, customers, prospects and “influencers” take place on a plethora of platforms and the synthetic division between UC and CS will be a challenge to maintain. By having experience, customers and products in both camps, West is in a good position to manage how enterprise-wide IP-based assets can be brought into the talk paths between its clients, their employees and their customers.

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Tags: mobile services, Cloud Telephony, hosted services, West Corp