Cisco will buy BroadSoft for about $1.9 billion in a deal that gives Cisco an edge in selling software and cloud services to telecommunications companies.

BroadSoft will join Cisco’s Unified Communications Technology Group led by Tom Puorro, VP and GM in the applications group.

In a call with SDxCentral from BroadSoft’s annual show in Phoenix, Puorro said BroadSoft’s small and medium-sized business (SMB) products will close a gap in Cisco’s offerings.

“BroadSoft has more than 19 million business subscribers, and if you look at their market, folks in the SMB space are moving to cloud-first,” Puorro said. “We want to be part of that cloud transition as those customers move from on-premises to the cloud.”

Under the BroadSoft agreement, Cisco will pay $55 per share, in cash, for each share of BroadSoft.

Buying BroadSoft, which has partnerships with more than 450 telecom carriers in 80 countries, will strengthen Cisco’s software portfolio targeting telecom providers, wrote Rob Salvagno, vice president of corporate business development at Cisco, in a blog post.

“Following the close of the acquisition, Cisco and BroadSoft will provide a comprehensive SaaS [software-as-a-service] portfolio of cloud-based unified communications, collaboration, and contact center software solutions and services for customers of all sizes,” Salvagno wrote. “BroadSoft’s portfolio is complementary to our existing on-premises and enterprise-centric Hosted Collaboration Solutions (HCS), as well as Cisco’s overall cloud investment strategy.

The acquisition also advances Cisco’s push to move customers from perpetual to subscription software licenses, and fits in to the company’s goal to transition from a hardware to a software company. “This is really moving us in that software direction,” Puorro said.

Cisco expects the deal to close in the first quarter of calendar year 2018.

This acquisition follows Cisco's planned purchase of artificial intelligence (AI) startup Perspica announced last week. The Perspica deal marked Cisco’s 200th acquisition.