The Unicorns of UC
Who is the next vendor to achieve unicorn status as this industry booms?
There’s been an awful lot of commotion in the UC industry of recent times. Zoom launching their IPO. Slack opting for a public listing. Talkdesk achieving a $1bn valuation in the contact centre industry.
Are these figures correct? We won’t know until an investor comes in. It’s likely, however, given the power and experience that goes into valuing a company. So, with such great stories being told in the Unified Comms and contact centre industries, catching yourself a unicorn is now a reality is our little world of phones and call routing.
Timeline and background
The first major story to drop last year was that, according to unnamed sources, investment banking and capital markets giant, Morgan Stanley were reportedly ready to take Zoom public. Referring to Zoom’s most recent round of funding at the time, Zoom was valued at $1bn.
Now, investors that perhaps turned down Zoom years before, will be kicking themselves. Why would they turn down an opportunity in a to-be video conferencing giant? There are two main answers to this.
Microsoft and Cisco.
The shift to Microsoft Teams could not have been foreseen. Slack, who probably pioneered the platform of team messaging, wasn’t around but now boasts 500,000 organisations using it’s meeting and collaboration platform.
Cisco Webex powered the highest number of meeting minutes per month. The all-conquering Webex brand has now introduced Cisco Webex Teams, another Slack competitor. Putting all your money on Zoom definitely didn’t seem a wise choice when you evaluated the video and meeting alternatives.
Zoom is in the geographical hot zone for IPO, is knocking on the door or the biggest collaboration players and is led by a Chief Exec that sold Webex to Cisco for $3.2bn.
Slack comes with a similar story. They disrupted the communications market and turned it into a collaboration market. Introducing countless productivity gains through a new way of working, embedding communications and integrating to third party apps, Slack is currently valued at $7bn.
Their decision to be listed direct is questionable. Traditionally, investors could be put off by the lack of information and predictability during this listing. More realistically, they’ll be turned on by Slack’s, well, “slackness.”
The most recent addition to the unicorn community is Talkdesk. In a world where millennials won’t use a phone for talking and chatbots are taking over customer service, Talkdesk has been valued at $1bn.
By committing to the customer experience of the future, Talkdesk has ensured its proposition is ahead of the game – and comes with the industry’s only 100% uptime SLA. If your contact centre hasn’t been taking over by machines yet, Talkdesk is a great option – hence the valuation.
So, who’s the next UC unicorn?
The future of UC looks like API, automation and intelligence – not necessarily artificial intelligence but intelligence to make things more efficient.
When assessing the industry, there are some big names that you could through to the fore.
RingCentral stock price has risen more than 20% over the last few months. That’s big for anybody on the New York Stock Exchange, let alone a communications company.
Usually, when a CEO goes on Mad Money, something big is happening and going to continue. RingCentral CEO, Vlad Schmunis, went on Mad Money and said RingCentral is going to be bigger than Avaya. Stock price rises. Following acquisitions of companies to bolster both their Unified Comms and contact centre portfolios, Glip a few years back and notably Dimelo, RingCentral then announce better than expected 2018 Q4 results. Stock price continues to rise. Attending the RingCentral customer conference last year, the vibe was uber positive. We are RingCentral. You just don’t sign up with anyone else.
I’ve come across some negative comments about RingCentral, sure. Prospects have seen poor reviews in the very small business sector. But, in my experience, these are technophobes whose internet was probably down or phone wasn’t plugged in. Probably.
There has been a shift in RingCentral’s strategy. It’s no longer SMB. In the final quarter of 2018, RingCentral reported enterprise business has grown 99% year on year. That’s what a unicorn in the making looks like.
Five9 CEO, Rowan Trollope, and his team of high-flying former Cisco executives have a big job on their hands. But they’ve made it their job. The significance of Rowan Trollope leaving Cisco for Five9, coupled with the weight of hires through the door since his arrival speak volumes. Five9 is going all in.
The pressure was on and they had to make an instant impact. They did. For the year ending on the 31st of December 2018, Five9 revenue increased by 29% year-over-year, to $257.6 million. Adjusted EBITDA for the year was $46.4 million. For 2019, Five9 says income will be between $298.5 million and $301.5 million. And that’s before they acquire anyone.
With staff like Jonathan Rosenberg, with his deep history in developing SIP, and Rowan Trollope with his passion for customer experience, artificial intelligence and all things futuristic, it feels like it will only take one big buy to transform Five9 into the next Unified Comms unicorn.
Speech recognition, automated transcripts, machine learning with actionable insights are all available today. Whether customers are using these technologies is another question. But what can surely be said, is that with the power behind the Five9 executive team, this is a brand that could force businesses not just to be better but be the best.