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Alcatel-Lucent Enterprise embraces RingCentral UCaaS

The RingCentral partnership means Alcatel-Lucent Enterprise's on-premises customers can stay with the vendor and get better cloud-based communications than ALE currently provides.

Alcatel-Lucent Enterprise plans to replace its Rainbow unified-communications-as-a-service product with RingCentral's in the first quarter of next year. ALE is the third maker of telecommunications gear to embrace RingCentral UCaaS technology in the last 10 months.

Alcatel-Lucent Enterprise (ALE) and RingCentral will contribute development and sales and marketing resources to the new product, called Rainbow Office powered by RingCentral, executives said this week. Also, ALE will provide migration tools for customers that want to move from their on-premises UC products to the new cloud version.

The strategic partnership is the third RingCentral has struck with hardware suppliers in less than a year. The other partners are Avaya and Atos. Avaya introduced Avaya Cloud Office by RingCentral in October, while Atos unveiled the Unify Office by RingCentral in February.

The playbook is the same for the three deals. RingCentral gets access to the larger companies' customer base, and they get to offer a co-branded UCaaS product that they don't have to build.

Terms of the RingCentral UCaaS deal

ALE accepted $100 million in cash from RingCentral in return for giving it exclusive access to ALE customers. The multiyear deal included future commissions and a minimum-user commitment. The companies declined to provide more details.

ALE has 40 million users of its homegrown Rainbow product, compared with RingCentral's 2 million UCaaS users. However, RingCentral expects the three partnerships to raise that number to 180 million eventually. Most of those users would come from the partners' on-premises customers.

The ALE and Avaya deals do not include the vendors' contact center-as-a-service offering. Both companies will continue developing their products alone.

Enterprises want UCaaS

RingCentral's partnerships are part of the same trend that led to Cisco buying Broadsoft in 2017 and Japanese company NEC partnering with Intermedia in April. Makers of on-premises gear find it "incredibly difficult to build their own UCaaS platforms," said Nemertes Research analyst Irwin Lazar. As a result, they jump-start their efforts through partnerships or acquisitions.

Customers happy with RingCentral's partners benefit from the deals by not having to leave their telephony supplier for cloud-based communications, said analyst Zeus Kerravala of ZK Research. "The goal of these products is to help the installed base first."

The number of companies looking at UCaaS is growing. A pre-pandemic Nemertes survey found that 43% of enterprises running in-house UC systems were either planning or evaluating a move to the cloud. "That trend has likely accelerated since the pandemic," Lazar said.

ALE and Atos are European companies that RingCentral said would give it a global reach. Avaya, on the other hand, is strongest in North America.

In April, RingCentral launched a video conferencing service called RingCentral Video, which is part of the vendor's UCaaS offering. RingCentral had partnered with Zoom for video but intended to switch as many customers as possible to its service eventually.

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