The Takeaways from RingCentral Analyst Summit

Last week, I attended RingCentral’s analyst summit which provided an opportunity to interact with various company executives, customers, and partners. The event offered insights regarding company updates, product and market messaging roadmap, customer wins, and even a strategic announcement impacting the broader communications and collaboration industry.

Below is a summary of my takeaways from the event:

Strategic Partnership with Avaya

One of the surprises at the event was an announcement from Vlad Shmunis, the founder and CEO of RingCentral, revealing that the company has entered into a strategic partnership agreement with Avaya. This is important given that Avaya has gone into — and then emerged from — Chapter 11 in December 2017, and there has been much deliberation on what’s the next for the company. There were rumors of a private equity buyout, Mitel making an offer to merge the two businesses, and rumors that the company may divest part of its business assets / units to cover debt obligations on its balance sheet.

The partnership between RingCentral and Avaya provides the latter with a $500 million cash infusion. This comes in the form of RingCentral paying $375 million in advance for future licensing rights and commissions, and $125 million in preferred equity investment corresponding to a 6% stake in Avaya.

As a side note, the press release for the partnership noted that Avaya plans use $250 million generated through this partnership to pay its existing debt obligation and may also repurchase up to $500 million of its common stock. Vlad Shmunis noted that the partnership provides RingCentral with access to Avaya’s approximately 100 million users of communications tools that the two organizations would jointly enable with a path to migrate to the Cloud through a product called Avaya Cloud Office by RingCentral (ACO) — set to launch in the first quarter of 2020. To this point, Jim Chirico, CEO of Avaya noted that this isn’t a reseller or OEM partnership, but rather a partnership creating an Avaya offer powered by RingCentral’s multi-tenant UCaaS capabilities. As part of this partnership, RingCentral will be the exclusive provider of UCaaS (unified communications as a service) solutions to Avaya.

Both Shmunis and Chirico stood on stage to share the announcement with the industry analyst community at the event. While the two CEOs emphasized that this partnership is beneficial for both companies, it’s ultimately driven to facilitate users of on-premises technology tools to move to the Cloud in a seamless manner. Aberdeen’s research shows that in the contact center, the move from on-premises to cloud technology has been an ongoing trend where adoption of cloud technology has increased by 93% between 2013 (30%) and 2019 (58%).

On the stage, Chirico also noted that Avaya is planning to launch a new cloud contact center (CCaaS – Contact Center as a Service) product which he emphasized that leveraging RingCentral’s cloud expertise will provide Avaya with added focus on building and launching this new product, instead of spreading resources to also develop a UCaaS solution. Personally, I find this partnership to provide potential for the two businesses to collaborate on the contact center side as well. RingCentral has been increasingly focusing on digital enablement through its Dimelo acquisition in October 2018. Combining the company’s digital capabilities with Avaya’s focus on AI in the contact center may provide a compelling option for contact center users.

Company Roadmap

During the opening session of the event, Dave Sipes, COO of RingCentral, noted that there are three key pillars / themes influencing the company’s product and market messaging roadmap. These are:

• Effortless: refers to requiring minimal to no effort by employees and customers to communicate and collaborate
• Intelligent: refers to enriching existing communications and collaboration activities with AI capabilities to make conversations more frictionless. As an example, recommending a contact center agent a subject-matter expert (SME) who’s currently available to address the issue that the agent is working on to help a client
• Open: refers to the ability to integrate with third-party applications such as CRM, knowledge management, and help desk that companies use to run their business activities — enabling companies with easier implementation and user experiences

Many of the conversations at the event emphasized how the company’s product and market messaging activities revolve around the three pillars noted above. To this point, Amrit Chaudri, SVP of Marketing at RingCentral noted that they observe that on average, 25% of time employees spend in meetings is spent on irrelevant activities such as resending meeting details, changing screen share from one attendee to another, etc. Kira Makagon, Chief Innovation Officer at RingCentral added that activities to develop new products and improve existing ones are heavily focused on improving user experiences to facilitate employee productivity and better customer experiences.

As noted earlier, RingCentral has made several recent acquisitions to strengthen its contact center capabilities. At the event, conversations with Jim Dvorkin, SVP of Customer Engagement and John Finch, VP of Product Marketing at the company provided us with an overview of how those acquisitions have been integrated into the contact center product and the related results the company observes. It was noted that the company has observed 100% year-over-year growth in number of bookings from enterprise customers — signaling that the combined capabilities through the recent acquisitions are driving interest across larger contact centers with more complex requirements on efficiency, customer experience, and cost reduction.

One of the important takeaways from contact center discussions was Jim Dvorkin’s note on chat bots. Aberdeen’s research shows that contact centers continue increasing their adoption of the technology. However, just like any other technology, chat bots deliver results when they’re used properly. To this point, Dvorkin noted that firms implementing a chat bot solely with the aim to reduce agent headcount quickly fail. Those who succeed in using the technology are firms that understand that chat bots are a valuable asset for optimizing the self-service experience, but that they shouldn’t be expected to replace the need for live agents since customers still need live agents to help resolve rather complex issues.

Final Note

The enterprise communications and collaboration and contact center markets are evolving fast. More vendors are entering the space while existing and new providers establish strategic partnerships to fuel growth or preserve market share. What are your thoughts on the above observations? Please share your comments below.