CRN Exclusive: RingCentral Channel Chief Plans To Disrupt The Enterprise UCaaS Market; Forms Partnership With Telarus

RingCentral's new channel chief, Zane Long, has been bolstering the unified communications vendor's channel drive like never before, resulting in its strongest quarter ever for indirect sales.

Through several new channel initiatives -- including offering a $50,000 bonus for any partner that closes a 5,000-user account deal as well as doubling the number of RingCentral channel managers -- the Belmont, Calif.-based vendor is mounting an unprecedented push by its channel community into the enterprise unified communications space, according to Long.

"We're waking up the partner community to where you can now find 'RingCentral' in the same sentence as 'large enterprise,' " said Long in an interview with CRN. "We're at an inflection point where large enterprise customers are starting to demand cloud solutions like never before, and it was the first quarter we were able to engage with some pretty significantly sized enterprise customers, and partners recognizing that will bring us more."

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For its first fiscal quarter of 2016, ended March 31, the Unified Communications-as-a-Service (UCaaS) vendor reported a 33 percent year-over-year increase in its software subscription revenue, to $80 million, out of RingCentral's $86.5 million in overall revenue. Indirect channel revenue accounted for 25 percent of RingCentral's overall sales for the quarter, up from 20 percent in the 2015 first quarter.

The successful quarter pushed the vendor's market cap to a 2016 high of $1.4 billion. Also during the quarter, RingCentral witnessed its second-largest deal by a channel partner in its history: a 2,000-user sale with the global technology company ARC Document Solutions, the company said.

The vendor's channel push has attracted new channel partners and distributors, including Telarus, a Sandy, Utah-based master agent. Telarus has more than 6,000 agents who now have the opportunity to quote and sell RingCentral services for the first time.

Patrick Oborn, Telarus co-founder, said RingCentral's recurring revenue opportunities are enticing solution providers, while its technology is winning new cloud customers.

"RingCentral is going to be in demand, because unlike Microsoft and some of the other bigger players, they own and created their own platform," said Oborn. "That will give them the ability to respond to user requests. So as people are using their technology, RingCentral will be nimble enough to react to requests and keep their product ahead of the pack."

The UCaaS market is growing at an annual rate of 16 percent, with revenue from UCaaS currently at more than $4 billion, according to a recent Synergy Research Group report. Research firm IHS said more than half of enterprises in North America this year will be running at least some of their unified communications applications in the cloud.

With more than 300,000 customers, RingCentral was named a Leader in UCaaS in Gartner's UCaaS Magic Quadrant. The research firm ranked RingCentral as the No. 1 vendor in the world for UCaaS vision.

RingCentral is hoping to capitalize on its market position by enticing channel partners and helping them go after and close larger deals, according to the company.

One new key initiative is providing direct RingCentral sale experts to work alongside solution providers to close a deal, with both sales reps being paid in full, Long explained.

"When a partner brings us any opportunity with 50 users or greater, we deploy our direct sales people in that geographical area, and we will assist the partner and/or sell to that customer entirely on behalf of the partner," said Long. "We'll take complete control of the opportunity to close that deal on behalf of the partner and keep everyone whole. We don't take anything from the partner financially or [from] direct sales reps. It's one of the purest channel harmony programs I've been a part of."

Oborn said the strategy is a "huge value add" for Telarus.

"There's no commission hit, … so if we now get engaged where we think RingCentral is a great fit, we can bring in somebody who's been intimately trained on the RingCentral platform to help us close that sale without charging us anything for that service," said Oborn.

Another new enticement is a promotion that offers channel partners a $10,000 bonus for bringing in a 250-user lead to the table that gets closed, as well as a $50,000 bonus for partners who find and close a 5,000-user account. The promotion is running from March to June.

"We're putting the money out there for the channel," said Long. "Some of these larger enterprise-based customers are looking to RingCentral now for cloud solutions.

Over the past year, RingCentral has increased the number of channel managers across the country from 10 to 18, and has plans to hire five more by the end of the year, the company said.

The vendor is also launching a "state-of-the-art" new partner portal June 1 for its channel to help partners scale more rapidly.

"We're looking to move into larger enterprise customers," said Long. "We've now reached a maturity that those types of customers recognize our ability to serve them. The company is committed to the channel, the executive team is committed, and we will grow the program."