Mitel and RingCentral have ended their exclusive unified-communications-as-a-service (UCaaS) partnership, CEO Vlad Shmunis has revealed.
The partnership, announced in 2021, made RingCentral the preferred partner for Mitel on-prem customers wanting to move to the cloud.
The deal differed from RingCentral’s partnerships with the likes of Avaya because the customer would move to RingCentral’s platform rather than a platform powered by RingCentral, like Avaya Cloud Office. The partnership saw Mitel step away from the UCaaS space and it has since acquired Unify from Atos.
Shmunis revealed the news on an earnings call with analysts, during which discussed RingCentral’s various partnerships.
“In Q2, we acquired certain additional assets and customer relationships related to Mitel’s MiCloud Connect and Sky UCaaS platform,” he said.
“While we have migrated hundreds of thousands of Mitel’s cloud seats already, we expect that this will allow us to provide a better customer experience for the remaining cloud base in their customer’s digital transformation journey.
“Moving forward, RingCentral and Mitel will be non-exclusive partners.”
RingCentral no longer features in the product listings of Mitel’s website, and a URL that previously promoted RingCentral on Mitel’s website is now a dead link (a cached version can be found here).
UC Today has contacted RingCentral for comment, while Mitel provided comment after publication.
Mitel Chief Marketing Officer Eric Hanson said: “This strategic shift enables both companies to address customer needs while focusing more deeply on our respective go-to-market strategies.
“With a growing number of customers today seeking a hybrid cloud approach, Mitel is focused on continued innovation of our hybrid, private cloud and on-prem UC solutions.
“Our portfolio supports integrations with various UCaaS vendors, and will continue to do so, giving us the flexibility to deliver the right mix of deployment options to meet each customer’s business needs.”
Meanwhile, industry analysts Zeus Kerravala and Dave Michels have said the changed partnership could play out well for both vendors.
Michels said the deal gives Mitel more flexibility and expects more UCaaS partnerships to be announced.
“Mitel and RingCentral struck an interesting update to their agreement,” he said.
“Mitel’s situation changed dramatically with the acquisition of Unify, and it needed more flexibility to accommodate its now larger, more diverse, and more complex base.
“Mitel sold its remaining UCaaS customers (MiCloud Connect and Sky UCaaS) to RingCentral and will now pursue public-private hybrid-cloud strategies with multiple providers.
“The arrangement also expands RingCentral’s offerings into hosted, single-tenant offerings, which is also interesting.”
Kerravala also said he expects Mitel to strike more deals, or perhaps re-enter the UCaaS space through M&A.
“This is a good thing for Mitel as it gives the company more options,” he said. “RingCentral gets the old MiCloud Connect users they can flip while Mitel now has options.
“I suspect there is another shoe to drop, either a partnership with someone like Zoom or possibly an acquisition of a UCaaS provider. But the market has evolved since the deal was cut and it’s time for both to take their next steps.
“Mitel already works with other UcaaS providers [through interoperability] so this really is a good evolutionary step. Ending the exclusive partnership gives them options and as Mitel moves up market, options are important.”
Riding the Teams Wave
Shmunis was speaking as RingCentral published quarterly earnings that beat guidance.
Sales rose to $593m in the quarter ending 30 June, up 10 percent year on year.
The CEO said RingCX, launched last year, performed ahead of expectations.
Large deals continued to come in on the UC side, albeit it is not as large as in the previous quarter.
RingCentral had one of its largest deals ever in Q1, a 40,000-seat contract with a retailer, and followed it up with two 10,000-plus seat deals in Q2—both also with retailers.
Shmunis also said RingCentral is continuing to ride the Microsoft Teams wave.
“As we have seen the last few quarters, many enterprise customers want our deep Teams integration,” he said.
“In fact, more than half of our large deals this quarter were again to customers that are utilising our solutions integrated with and alongside Microsoft Teams.
“This is a key differentiator and an important reason why we see teams as a tremendous opportunity to grow our presence with the many large enterprises that use it for collaboration but are also in need of best-in-class telephony.”
