RingCentral announced in August the signing of a strategic partnership with Alcatel-Lucent Enterprise (ALE). Following on from a similar deal in July with Atos, RingCentral’s partnership program is coming along in leaps and bounds.
ALE brings 2900 channel partners and a strong presence in Europe especially focused in France to RingCentral and access to an on-premise base of over 40M UC customers. Rainbow Office powered by RingCentral will be available in the first quarter of 2021 and both companies will contribute resources towards the development, sales & marketing of Rainbow Office powered by RingCentral. RingCentral will also pay Alcatel-Lucent Enterprise $100 million in cash for exclusive access, a minimum seat commitment, and future commissions.
With ALE’s strong French presence, Atos’ German heritage with Unify, Avaya’s global scale, and partnerships with carriers such as BT, AT&T, and Telus, RingCentral has built a great partner program to expand into Europe and beyond
Cloud becoming success for on-premises vendors
It is fascinating to see how the PBX market is consolidating around cloud and how many of the PBX vendors are partnering with cloud providers to enable their customers to move to cloud instead of launching their own products. We know that customers are looking for best in class, especially when moving to cloud, and in many cases the PBX vendors cloud products were not up to scratch which has led them to partnering with cloud providers instead of acquiring capabilities. The exception to this rule is Mitel whose acquisition of Telepo in 2014 has formed the basis of its cloud strategy within Europe to great success, especially in the Nordic markets.
COVID has also exacerbated the move to the cloud and the PBX vendors have had to adapt quickly which will have driven these partnerships to have moved forward quicker than we might have expected. Avaya’s CEO stated that its “transformation to a software, SaaS, and Cloud-focused company is irreversible” in its Q1 results cloud revenues which were under 15% of revenue a year ago, reached 30% of revenue this quarter.
For PBX vendors such as Avaya, Atos and now Alcatel, partnering with a cloud first brand has enabled them to go to market quickly with a market-leading product. For RingCentral, it opens huge opportunities in markets where it has not traditionally had presence without the need to invest in building up its own partner program. Issues may still arise around channel conflict in the future as channels want to put something different in their portfolio but this may provide opportunities for other vendors in the future.