Munich-based cloud PBX provider NFON announced last month sizable growth numbers during 2020, significantly outpacing market expectations.
In the face of global downturns during the COVID-19 pandemic, NFON’s cloud telephony services for business communications reportedly succeeded in achieving considerable growth in both terms of new seats added as well as higher revenues per customer.
According to the company, NFON grew recurring revenues by 23.6% to reach a total of EUR 59.4 million, beating out 2019’s EUR 48.1 million. These numbers helped the firm to achieve a total of EUR 67.6 million for 2020. Another significant milestone for the company included having surpassed 500,000 seats at a rate of 16.7% over the year before, helping to solidify their gains in their markets.
Looking back at the past year, there are a number of clear indicators that drove NFON’s growth in the European voice-centric business communications space.
Factors Leading to Growth
The move towards the cloud was already moving full steam ahead before the Coronavirus forced businesses throughout the world to shut their doors and shift over to remote work.
The ability to scale up compute and storage services with products from AWS, Microsoft, and Google through the cloud has led many organizations to start their adoption of cloud services. They have recognized that by moving away from the on-premises models that require larger capital expenditures and maintenance by internal resources, they can work more efficiently and reach better cost efficiency results.
Similarly, organizations of all sizes –– from smaller operations to SMEs and the enterprises –– have understood that the cloud-PBX model makes more sense for their business. Advantages include the flexibility for adding new seats as needed and receiving support without additional investments in personnel or expertise.
In light of these benefits, the market has moved towards streamlining technology stacks that is pushing organizations to adopt newer, more advanced cloud communications models.
“After the phase-out of ISDN and the ongoing replacement of outdated phone system technology with cloud PBX, we are immediately in the third wave of disruption,” says NFON’s CTO Jan-Peter Kooperman.
“Telephony, collaboration with video or chat and business applications such as contact center solutions are converging,” he explains. “Customers want to use a platform in which they can switch between voice, video, text and collaboration fluently, easily guided and without complications. It clearly follows that we will offer a complete UCaaS suite with exactly these components, complemented by open APIs and further omni-channel solutions.”
While making the move to a cloud-based telephony environment had been on the roadmap for many organizations, the necessary WHF situation led many organizations to take the leap in 2020 –– further adding to NFON’s revenues and growth.
Now as organizations contemplate their next steps for the hybrid working environment, NFON expects to see further growth materialize in 2021.
Expectations Looking to 2021 and Beyond
Moving into this year, NFON reports that they foresee between 15-17% seat growth and a 14-16% rise in recurring revenue.
Along with the technological trends and factors that are driving this growth, NFON’s CEO Dr. Klaus von Rottkay says that he is looking to expand their partner channel network in Europe in various market segments to help further their efforts.
“As part of our growth course, we will not only increasingly sell our new products to our existing customer base,” says Dr. von Rottkay. “We will of course also continue to expand our partner network in Europe. For us, the partner stands absolutely and unwaveringly at the center of everything we do. At the same time, we will increase our focused customer segment in the small and medium business (10 – 250 extensions) to the enterprise segment.”
They plan to build on their growth in markets like the UK and Germany to help them make bigger pushes into other European markets like those in France and Italy where there are opportunities for growth over the next few years.
“Our 2024 growth strategy can be summarized in three words: Target – Enhance – Scale,” says Dr. von Rottkay. “Our business takes place in Europe, and that is where we are staying. It is precisely this presence and the product portfolio tailored to it that we will optimize. We will expand our existing PBX business in the direction of ‘smart workflow’ voice-centric business communications and, starting with our more than 2,700 partners, invest in the expansion of this network.”
