Enterprise

RingCentral is battling Zoom and Teams. Here's how it hopes to win.

Despite being an underdog, the videoconferencing company is banking on key partnerships as a route to success around the globe.

RingCentral is battling Zoom and Teams. Here's how it hopes to win.

"Don't count us out," RingCentral CEO Vlad Shmunis told Protocol. "Rome lost many battles, but never a war."

Image: Chris Montgomery

The Roman Empire had many enemies in its over 1,000-year history, but ultimately prevailed against most. That's why RingCentral CEO Vlad Shmunis is so apt to use it as a comparison.

The company is in the midst of a fierce competition for dominance in the rapidly growing cloud-based communications industry against Zoom, Microsoft and others. But despite its position as a relative underdog, Shmunis is confident the company will emerge victorious in the end.

"Don't count us out," he told Protocol. "Rome lost many battles, but never a war."

One of those early skirmishes is against Zoom. At the start of 2020, as COVID-19 swept across the globe, Zoom became more than just a company, morphing into a moniker for the need to communicate virtually amid tightening lockdowns. But as enterprises and consumers alike flocked to the videoconferencing platform, Zoom struggled to handle the increased capacity and suffered embarrassing missteps, like the revelation that a former employee helped the Chinese government suppress communications related to the deadly Tiananmen Square protests.

That is all creating an opening for rivals. Now, Zoom is rushing to try to bolster its offerings to catch up, including a rumored email application, to ensure the boom in business it got amid the pandemic turns into long-term customers.

"A lot of Zoom's success has been really served up to them in an incredible way," Rosenblatt Securities analyst Ryan Koontz said. "But I question the durability and the churn they are going to have on the other end of the pandemic."

Meanwhile, Microsoft Teams, perhaps RingCentral's most direct competitor, remains the elephant in the room with its 115 million active users. But without a broader office suite to sell clients on like Microsoft, RingCentral is poised to stand out with key partnerships that promise to place its technology in many more enterprises across the globe.

'We saw a few Zooms come and go'

For RingCentral, the pandemic served as somewhat of a culmination of the trends it had pinpointed years ago. The 21-year-old company realized that, as broadband became more ubiquitous and corporations increasingly globalized their operations, the workforce was set to be divided between those who operated remotely, employees who went into the office each day and some combination of the two.

So RingCentral, which had previously provided onsite communications tools, invested heavily in making sure its product line was ready and, in almost suspiciously perfect timing, released its own videoconferencing platform in April after years of development, right as COVID-19 paralyzed the globe. Nine months later, the company is, at least to some, in a stronger position than Zoom and slated to potentially emerge as a leader in the new ecosystem.

"We've been at this for a long time. We saw a few Zooms come and go," Shmunis said.

Part of that optimism is due to RingCentral's early execution on its long-term vision. The company struck lucrative partnerships with on-prem communication providers like Avaya and Alcatel-Lucent, ensuring that as their customers, which total hundreds of millions of users, pivot to the cloud from the old PBX (or on-premise) systems, it would be RingCentral's products they use. The company also has agreements with carriers such as AT&T and Vodafone.

On the partnership side, "no one else is at their level," Koontz said.

But not everyone is as optimistic, particularly given Zoom's explosive growth last year and the continued dominance of Microsoft. "RingCentral should be worried," Sapphire Ventures co-founder Jai Das said.

Still, as Zoom angles to compete more directly against Microsoft, Google and others, RingCentral envisions a future beyond just video or chat — a future where a unified platform can serve as the hub for work across the enterprise. RingCentral isn't alone in this strategy. Salesforce, for example, outlined a similar vision for its acquisition of Slack. But recent acquisitions by RingCentral, including its December purchase of AI-backed DeepAffects for an undisclosed sum, provide an early look at what this could actually mean for users.

Effectively the goal is to layer more "intelligence" tools on top of the core platform itself. While years away from being fully realized, it could mean that, nearly the second a call is ended, a full outline is provided to all participants. Or when a participant poses a question about something like a company's earnings, that information is immediately presented on screen.

"Everything, with permission from the participants, should be recorded and should be processed in real time and then post-processed for better accuracy," Shmunis said. And more deals are on the way to turn that into a reality. "Expect that [DeepAffects] is not our last acquisition and not our last acquisition in AI — and in conversational AI in particular," he added.

Preparing for the $10 billion jump

RingCentral is confident it has an open runway to lead in this burgeoning space.

Globally, there are roughly 500 million PBX licenses, according to Shmunis, and just under 5% of those users have transitioned to the cloud, creating a massive market potential. The growth opportunity was evident in RingCentral's results from last year, although some of it Shmunis admits was a short-term rush as companies quickly pivoted to virtual workspaces. Still, revenues in the third quarter rose 30% to $304 million.

And while several execs at the company said they don't view Zoom (or Microsoft, for that matter) as a key rival, it's hard to not think there is some competitive pressure given RingCentral's decision to release its own free videoconferencing platform, Glip.

Apart from the product line, Shmunis is gearing RingCentral up for the next phase of the battle — which includes a pivot to international markets — by overhauling his executive team. That included the departure of long-term chief operating officer Dave Sipes, who left in June and was recently appointed CEO of 8x8. Shmunis tapped former Microsoft executive Anand Eswaran to replace him.

Sipes helped take RingCentral from "$10 million to $1 billion, which is amazing. The vast majority of businesses never get anywhere close … [but] now we need a management team that is familiar with running $10 billion companies," Shmunis said. "Where we want to go is multiple products, completely global [with] meaningful partnerships."

RingCentral also poached from Microsoft to hire chief digital officer Matthew Bishop and tapped Rajeev Singh Rathore to lead partnerships in South Asia, among other hires. Those executives and others will be key as the company looks to solve the question of how to make businesses and individuals collaborate and communicate better in the new reality of hybrid work.

"I don't think we've cracked that problem. All we've done is put a TV screen in front of us," Eswaran told Protocol. "Zoom became a cultural icon, but the market is just getting started. It is a huge market and we feel really good."

Entertainment

Google is developing a low-end Chromecast with Google TV

The new dongle will run the Google TV interface, but it won’t support 4K streaming.

The Chromecast with Google TV dongle combined 4K streaming with the company’s Google TV interface. Now, Google is looking to launch a cheaper version.

Photo: Google

Google is working on a new streaming device that caters to people with older TV sets: The next Chromecast streaming dongle will run its Google TV interface and ship with a remote control, but it won’t support 4K streaming. The device will instead max out at a resolution of 1080p, Protocol has learned from a source with close knowledge of the company’s plans.

A Google spokesperson declined to comment.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

COVID-19 accelerated what many CEOs and CTOs have struggled to do for the past decade: It forced organizations to be agile and adjust quickly to change. For all the talk about digital transformation over the past decade, when push came to shove, many organizations realized they had made far less progress than they thought.

Now with the genie of rapid change out of the bottle, we will never go back to accepting slow and steady progress from our organizations. To survive and thrive in times of disruption, you need to build a resilient, adaptable business with systems and processes that will keep you nimble for years to come. An essential part of business agility is responding to change by quickly developing new applications and adapting old ones. IT faces an unprecedented demand for new applications. According to IDC, by 2023, more than 500 million digital applications and services will be developed and deployed — the same number of apps that were developed in the last 40 years.[1]

Keep Reading Show less
Denise Broady, CMO, Appian
Denise oversees the Marketing and Communications organization where she is responsible for accelerating the marketing strategy and brand recognition across the globe. Denise has over 24+ years of experience as a change agent scaling businesses from startups, turnarounds and complex software companies. Prior to Appian, Denise worked at SAP, WorkForce Software, TopTier and Clarkston Group. She is also a two-time published author of “GRC for Dummies” and “Driven to Perform.” Denise holds a double degree in marketing and production and operations from Virginia Tech.
Enterprise

Why software releases should be quick but 'palatable and realistic'

Modern software developers release updates much more quickly than in the past, which is great for security and adding new capabilities. But Edith Harbaugh thinks business leaders need a little control of that schedule.

LaunchDarkly was founded in 2014 to help companies manage the software release cycle.

Photo: LaunchDarkly

Gone are the days of quarterly or monthly software update release cycles; today’s software development organizations release updates and fixes on a much more frequent basis. Edith Harbaugh just wants to give business leaders a modicum of control over the process.

The CEO of LaunchDarkly, which was founded in 2014 to help companies manage the software release cycle, is trying to reach customers who want to move fast but understand that moving fast and breaking things won’t work for them. Companies that specialize in continuous integration and continuous delivery services have thrived over the last few years as customers look for help shipping at speed, and LaunchDarkly extends those capabilities to smaller features of existing software.

Keep Reading Show less
Tom Krazit

Tom Krazit ( @tomkrazit) is Protocol's enterprise editor, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire, and served as executive editor of Gigaom and Structure.

Boost 2

Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs WordPress.com, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool Parse.ly and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Workplace

Building an antiracist company: From idea to practice

Twilio’s chief diversity officer says it’s time for a new approach to DEI.

“The most impactful way to prioritize DEI and enable antiracism is to structure your company accordingly,” says Lybra Clemons, chief diversity officer at Twilio.

Photo: Twilio

Lybra Clemons is responsible for guiding and scaling inclusion strategy and diversity initiatives at Twilio.

I’ve been in the corporate diversity, equity and inclusion space for over 15 years. In that time, I’ve seen the field evolve slowly from a “nice-to-have” function of Human Resources to a rising company-wide priority. June 2020 was different. Suddenly my and my peers’ phones started ringing off the hook and DEI leaders became the most sought-after professionals. With so many DEI roles being created and corporate willingness to invest, for a split second it looked like there might be real change on the horizon.

Keep Reading Show less
Lybra Clemons
Lybra S. Clemons is a seasoned C-suite executive with over 15 years of Human Resources, Talent and Diversity & Inclusion experience at Fortune 500 companies. She is responsible for guiding and scaling inclusion strategy and diversity initiatives across Twilio's global workforce. Prior to Twilio, Lybra was global head of Diversity & Inclusion at PayPal, where she managed and oversaw all global diversity initiatives. Lybra has held critical roles in Diversity & Inclusion with Morgan Stanley, The Brunswick Group and American Express. She serves on the board of directors of Makers and How Women Lead Silicon Valley Executive Board of Advisers, and has been recognized by Black Enterprise as one of the Top Corporate Women in Diversity.
China

Why China is outselling the US in EVs 5 to 1

Electric cars made up 14.8% of Chinese car sales in 2021, compared with 4.1% in the U.S.

Passenger EV sales in China in 2021 jumped 169.1% to nearly 3.3 million from a year ago.

Photo: VCG/VCG via Getty Images

When Tesla entered China in 2014, the country’s EV market was going through a reset. The Austin, Texas-based automaker created a catfish effect — a strong competitor that compels weaker peers to up their game — in China’s EV market for the past few years. Now, Tesla’s sardine-sized Chinese competitors have grown into big fishes in the tank, gradually weakening Tesla’s own prominence in the field.

2021 was a banner year for China’s EV industry. The latest data from the China Passenger Car Association shows that total passenger EV sales in China in 2021 jumped 169.1% from a year ago to nearly 2.99 million: about half of all EVs sold globally. Out of every 100 passenger cars sold in China last year, almost 15 were so-called "new energy vehicles" (NEVs) — a mix of battery-electric vehicles and hybrids.

Keep Reading Show less
Shen Lu

Shen Lu covers China's tech industry.

Latest Stories
Bulletins