RingCentral Winning UCaaS 'Chess Match' with Mitel Partnership
RingCentral's stock opened 20% higher on Wednesday.
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Carson Hostetter is RingCentral‘s chief revenue officer. He said Mitel has customer base of over 35 million users.
“Through this strategic partnership, we are acquiring IP related to CloudLink, which enables us to integrate RingCentral MVP with on-premises infrastructure,” he said. “CloudLink is a clear bridge to the cloud. It provides middleware that enables customers to integrate their on-premises infrastructure with MiCloud cloud platforms, and is now being repurposed to integrate with RingCentral. With CloudLink, Mitel’s 35 million-plus customers will be able to use the RingCentral app for team messaging, video, and to make calls with the app that leverages existing Mitel on-premises PBX. Every strategic partner makes a difference, but this one in particular is unique because Mitel now has a leading cloud solution to upgrade its base to. There is now a new opportunity to leverage CloudLink to provide a more flexible path to a leading cloud solution.”
By offering RingCentral MVP, going to market is much faster than waiting for a co-branded solution to be created, Hostetter said.
“Through the IP acquisition of CloudLink, we are able to integrate RingCentral MVP with on-premises infrastructure for transitional solutions on the path to RingCentral MVP, which is a big differentiator,” he said.
RingCentral partners will benefit by giving their customers an opportunity to migrate from traditional, on-premises based systems to the “leading UCaaS provider in the world,” Hostetter said.
“In addition, the partners will be able to take advantage of a competitive residual recurring compensation structure, incentives and bonus programs for each customer that signs with RingCentral,” he said.
In the future, the RingCentral-Mitel partnership may also offer possibilities for extending this cloud transformation experience to other on-premises PBX vendors, Hostetter said.
“Additionally, while we are initially focused on helping Mitel customers use CloudLink to move to RingCentral MVP, we’re open to exploring other customers’ use cases in the future,” he said.
Jon Arnold said it seems like a very savvy move to acquire IP/patents, along with access to another large swath of the premises-based communications customers.
“Not many players of substance [are] left who still have this type of customer base and are outside of RingCentral’s orbit,” he said. “And it looks like [CEO] Vlad Shmunis and team are inching closer to checkmate for cloud migration. The market will always be hypercompetitive, but as RingCentral keeps making these moves to align big legacy players with their platform, it’s going to get harder for others to keep pace. Based on the way money is flowing with this deal, you have to wonder if Mitel’s days are now numbered.”
Jay McBain is principal analyst of channel partnerships and alliances at Forrester. He said investors are continuing to react positively to RingCentral’s latest news.
“With 47% year-over-year growth just reported and exclusive UCaaS access to 35 million business customers of Mitel (upwards of 1 million users to be migrated immediately), investors have responded with a [big] bump in stock price today,” he said.
Jay McBain is principal analyst of channel partnerships and alliances at Forrester. He said investors are continuing to react positively to RingCentral’s latest news.
“With 47% year-over-year growth just reported and exclusive UCaaS access to 35 million business customers of Mitel (upwards of 1 million users to be migrated immediately), investors have responded with a [big] bump in stock price today,” he said.
RingCentral is riding high as its stock price soared on news of its strategic partnership with Mitel and positive third-quarter earnings.
RingCentral’s stock rallied 20% on Tuesday after announcing the Mitel partnership and its third-quarter earnings. It remained up nearly $50 a share on Wednesday.
J Arnold & Associates’ Jon Arnold
Jon Arnold is principal of J Arnold & Associates. He said the chess match to win the UCaaS space continues, with RingCentral yet again leading the way.
The new strategic partnership will provide Mitel’s global customer base with a migration path to RingCentral’s Message Video Phone (MVP). That’s RingCentral’s cloud phone system.
With this partnership, RingCentral becomes the exclusive UCaaS partner for Mitel.
RingCentral will pay Mitel $650 million to acquire intellectual property rights and patents covering network and call management, security and infrastructure. In turn, Mitel’s investor group led by affiliates of Searchlight will invest $200 million in equity in RingCentral.
Partnership Brings Together 2 ‘Leaders’
Vlad Shmunis is RingCentral’s founder, chairman and CEO.
“Mitel has an extensive network of thousands of channel partners servicing customers across the globe, who are largely incremental to our existing channel,” he said. “RingCentral will be the go-forward brand for all cloud technologies for Mitel customers. In summary, this new strategic partnership brings together two well-established leaders in business on-premises and cloud communications, respectively.”
For its third quarter, RingCentral reported $415 million in total revenue, a 37% year-over-year increase. That beat analysts’ expectations. Subscriptions revenue increased 38% year over year to $385 million.
We recently compiled a list of 20 top UCaaS providers offering products and services via channel partners. |
RingCentral said it lost $147 million in the third quarter, compared with a loss of $21 million in the year-ago quarter.
For the fourth quarter of 2021, RingCentral expects revenues between $433.5 million and $434.5 million, indicating year-over-year growth of 30%.
Scroll through our slideshow above for a more in-depth look at the RingCentral-Mitel partnership.
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