Alianza (Pleasant Grove) has signed an agreement with Microsoft to acquire Metaswitch (London), a provider of high-performance communications software. The acquisition will significantly expand Alianza's global reach, employee count, and brand.
Pleasant Grove, Utah, December 10, 2024
Alianza, Inc., a cloud communications platform for telecom service providers today announced it has signed a definitive agreement with Microsoft to acquire Metaswitch, a provider of high-performance communications software.
The acquisition will expand Alianza's base of customers and employees. From the customer perspective alone, the acquisition gives Alianza a combined customer base of more than 1,000 communications service providers, including 19 of the top 20 global operators. These include: AT&T, Verizon, Comcast, Deutsche Telekom, British Telecom, Swisscom, France Telecom, Telecom Italia, Telmex, Telstra (Australia), Telus (Canada), Charter Communications (US), and many others. The largest communications providers on earth will now be Alianza customers.
The Metaswitch acquisition significantly increases Alianza's platform footprint and reach of a comprehensive portfolio of services, streamlining the path of its customers to a cloud-orchestrated, AI powered communications future. With the integration of Metaswitch’s voice and communications software services, IP protocol, and engineering talent, Alianza will provide an expanded list of customers with myriad options for monetizing their network investments via on-premises, public, private, or hybrid cloud models. Alianza customers will have greater ability to consolidate complex voice operations onto a single, comprehensive operating platform.
Alianza, with its 650 employees located throughout the world, with many at its headquarters in Pleasant Grove, Utah, now plans to accelerate investments in product innovation, including AI-based capabilities for service providers to generate new revenue and deliver greater automation and insights for end-user customers.
“Alianza’s commitment to innovation and customer experience sets a strong foundation for Metaswitch customers to continue to grow their business,” said Yousef Khalidi, Microsoft Corporate Vice President. “The telecommunications industry remains a priority for Microsoft, and we will continue to empower telecom operators to modernize, monetize, and innovate through our secure AI platform. As we advance our cloud platform and AI capabilities, partners like Alianza are crucial for providing support to our mutual customers.”
Rohit Mehra, group vice president, Worldwide Network and Telecommunications, IDC, remarked about the implications of the acquisition for the telecom sector:
“Today, global operators face increasing competitive threats from OTT communications companies, whose services are gradually eroding their long-held position as market leader in the delivery of voice and collaboration services. The combination of the Metaswitch business with Alianza brings together a deep portfolio of services and expertise with proven cloud technology and product innovation to deliver end-to-end capabilities for service providers to modernize at their own pace.”
Metaswitch Networks, headquartered in London and formerly known as Data Connection Ltd., is a private communications company founded in 1981 by seven IMB employees. It provides network management infrastructure and systems to enable telephone service providers to migrate to Voice over IP (VoIP) networks while still supporting legacy telephone technologies. It was acquired by Microsoft in July 2020.
“The Alianza cloud communications platform empowers operators to monetize network investments through improved customer experiences and the delivery of modern, high-margin communications service offerings.”
The Metaswitch acquisition represents a significant win for Alianza. “It is about resetting the playing field and enabling service providers to reassert their market leadership,” said Brian Beutler, founder and CEO, Alianza, who sat down with TechBuzz to discuss the acquisition and share some insights about the history and culture of the company.
The Metaswitch acquisition becomes the latest of a series of milestones of a remarkable and at times turbulent startup journey marked by resilience and tenacity of its founder and management team, trust and patience of its initial seed investors, and a culture of toughness and grit, honed over years of dealing with obstacles and reverses that would cause many startups, under similar circumstances, to call it quits.
Founded in 2005, upon winning a BYU Business Model Competition, Alianza raised a $2 million pre-seed investment in 2006 from local investors from many of the OG Utah-based tech investors at the time, including Paul Ahlstrom, John Richards, Steve Gibson, Scott Frazier, Kyle Love, and others.
Scott Frazier remarked, "It has been a marvel to watch Brian Beutler’s triumph at the helm of Alianza. They rose from a small-time, retail call provider in Mexico to become a world-wide leader in telecom infrastructure, a position now cemented by this acquisition of the goliath Metaswitch. An incredible demonstration of grit—it wasn’t obvious, it wasn’t fast, and it wasn’t easy."
Beutler shared with TechBuzz the critical role mentors played in Alianza's early days in encouraging him to build the startup and helping him navigate the pitfalls of building a lasting business. He said, "After winning the BYU Business Plan competition in 2005, one of my professors, John Richards, came up to me afterwards and said, 'Hey, Brian, this is not an academic exercise. We want you to actually go start this business.'"
Beutler replied, "You know, John, that's going to be really difficult. The prize money from winning the business plan competition is not nearly enough to launch a business." Richards's reply set Beutler on a new course: 'Brian, we will help you raise the money." And so he did. "Long story short, John and others helped us raise our first round of financing in 2005. Since then, we've been on a slow and steady path, heads down, growing company. And over the last 12 years, we haven't had a single down quarter in revenue growth. And yet we've been flying under the radar, building something really meaningful and special," stated Beutler.
About the Metaswitch acquisition, John Richards recently shared, "Brian Beutler is one of my favorite entrepreneurs of all-time in which I am invested. He and I have been through a lot over the years in mentorship and the zigs and zags of Alianza. He has become a true friend and the success of Alianza is a testament to the genius and capability I recognized when he was but a young student."
"Essentially," as Beutler shared with TechBuzz, "Alianza provides communication software that powers millions of phone calls every day, connecting people around the world. We like to say we're the brand behind the brand," stated Beutler. "You may not know Alianza as a consumer, but the major service providers you purchase your communication services from absolutely know who Alianza is."
Over those 20 years of execution and growth, the company encountered several bumps in the road, one of which occurred early on. In 2008, as the Great Recession dried up capital markets, Alianza faced a near-collapse after a committed investor, a well-regarded local VC, failed its capital raise and pulled out as lead investor of the company's Series B round, leaving Alianza to deal with a $300,000 monthly burn.
At that point, the existing investors were faced with a crucial decision. They had provided Alianza with a much-needed bridge round to keep the company afloat as it anticipated the closing of its Series B and were now exposed and wondering what to do next.
Beutler explained, "When that round failed, it would have been really easy for those investors to bail, but they stuck with us, and that, for me, created a tremendous amount of loyalty to them. People took a chance and a very real risk on us, and I took that loyalty super seriously."
One of the investors, expecting him to close shop, regroup and maybe move on to another startup, asked Beutler, 'Why are you still here? Why are you holding on? If we couldn't afford to lose the money we would have never invested in you in the first place." However, despite receiving understanding from a key investor that stepping back would not be the end of the world, Beutler stated that walking away from his business, and his investors, was a foreign concept to him. "I'm gonna stick it out until we get a return for the investors," he recounted.
And even though that's exactly what he did, it did take a while, and it wasn't an easy road. Over the next three grueling years, the company clawed its way back, driven by a mission to create impact beyond financial returns and to instill a culture of grit, which has carried on at Alianza to the present day, making the acquisition of Microsoft's Metaswitch all the more meaningful.
Another early investor, Paul Ahlstrom, recognized the potential in Beutler as a determined founder and Alianza as a concept. Ahlstrom shared on LinkedIn: "There’s an old saying we used to joke about: 'This company was an overnight success after ten years of hard work.' This long awaited turning point after grinding it out for many years has been true for many great companies I have worked with including Ancestry.com, Mural, Convert.com, Technisys and Angel Studios. Well, my good friend Brian Beutler has taken perseverance to a whole new level. It’s been nearly twenty years since I first met Brian and invested as an early seed investor in Alianza after he won the BYU Business Plan Competition in 2005 and now each of us use Alianza's technology several times a day and we don't even know it."
Ahlstrom continued:
"Brian’s grit, determination, and vision to build a cornerstone company in the Utah tech ecosystem are nothing short of inspiring. The recent acquisition announcement of Metaswitch from Microsoft marks a significant milestone, solidifying Alianza’s position in its market segment and setting the stage to become Utah’s next unicorn. Brian’s journey is a testament to perseverance, long-term vision, and the type of leadership that defines Utah’s Silicon Slopes. Kudos to Brian and the Alianza team for leading the way and shaping the future of our tech community!"
Beutler touched on a core aspect of the culture—the impact-driven nature of the company—that he has been steadily cultivating within Alianza. "When you start off with a vision and mission of building an impact-driven company—not one that is purely financial in its orientation—it changes your paradigm. You start from this place of having a goal to accomplish, an impact to make not only on the company but on the entire community. When you're going through hard times, what gets you through it are the people in the foxhole with you. And what you come out of it with are lifelong friendships, deep relationships, and experiences that are forged in the fiery furnace—experiences that define you and define your company culture."
Beutler credits the resilience of employees, investors, and customers, especially its initial five unwavering customers, who locked arms during the struggle, ensuring the company’s survival and eventual success which this week is marked by the acquisitions of one of its biggest competitors. The experience underscores the power of loyalty, perseverance, and mission-driven leadership in navigating crises.
Beutler sees the experience of building Alianza into a pioneering telecom platform and the "Crossroads of the World." drawing a parallel to Utah's own remarkable pioneer history and its status as being the "Crossroads of the West." Beutler remarked, "What we're building at Alianza is in some ways "The Crossroads of the World." In the 19th century, Utah became the location for the connecting of competing 19th century railroads, crossing the vast expanses of the country with great effort and untold hardship to meet at Promontory Point, making Utah the Crossroads of the West. We have the chance to provide the platform on which a meaningful portion of global communications will run. Post this Metaswitch acquisition, hundreds of millions of phone calls will run on top of this platform every day, traversing not a rail network, but a software network that was born in Utah County, and that we have been building for 20 years. It will become the digital crossroads for connecting people globally."
Beutler believes that Utah's entrepreneurship ecosystem is healthy and a great place for founders to start businesses, but he thinks that many of the exits in the sector have been subscale and have fallen short of their potential to create truly large, sustainable enterprises that can transform a community. "It's well understood that Utah is one of the best ecosystems for tech startups. But like so many of exits in Utah, we've had opportunities to pull the rip cord and get bought by a bigger, out-of-state company, and to those offers we've consistently said, 'No, we want to build something durable, sustainable, something that can become a global brand, based here in Utah. We've maintained a conviction to remain an independent brand. And now we have the chance to solidify that brand and do so on a global scale."
Alianza's Metaswitch acquisition is expected to close in the first quarter of 2025. The transaction details were not disclosed.
