RingCentral's Long: Customers Demand Partners Provide UCaaS

Hundreds of partners are coming to RingCentral every month looking to make the switch from on premises, to the cloud and unified communications as a service (UCaaS).

That’s according to Zane Long, RingCentral’s senior vice president of global channel sales. During this month’s Channel Partners Evolution in Philadelphia, he spoke with Channel Partners about his company’s partner recruitment efforts.

RingCentral unifies voice, video, team messaging and collaboration, conferencing, online meetings and integrated contact-center offerings.

RingCentral has partnered with AGC Networks, a global technology integrator, to bring cloud services to enterprises globally. AGC has more than 3,000 customers, including Fortune 500 companies in nine countries.

RingCentral’s Zane Long

“As trusted advisers to our customers, we’re committed to identifying the best-in-technology solutions to help them drive greater business outcomes,” said Scott Davis, AGC’s executive vice president of sales and marketing. “RingCentral’s cloud communications and collaboration solutions enable enterprises to keep their workforces more connected, driving optimal productivity and deeper engagement.”

RingCentral works with distributors, master agents, channel partners and carrier partners to deliver cloud communications to businesses globally.

In a Q&A with Channel Partners, Long gives an update on the growth of RingCentral’s channel business and how more partners are coming to his company looking for help in transitioning their customers to UCaaS.

Channel Partners: What sort of channel growth has RingCentral been experiencing this year?

Zane Long: The growth has been extraordinary. In our [second quarter] earnings call, we talked about [how] the channel business grew over 100 percent year over year. That is extraordinary in any industry, but clearly here at RingCentral … and what’s happening in the UCaaS market, it’s giving us an opportunity to see those kinds of results. Of course, obviously the partner contribution that we have in our partner community also has been extraordinary in helping us achieve those kind of numbers and that growth. Quite frankly without the partner contribution, we simply would not have this kind of growth.

CP: What’s driving that growth? Does it have to do with how hot UCaaS is?

ZL: UCaaS is growing at roughly 40 percent year over year and I think [that percentage] might continue to climb as more customers become aware of UCaaS and the benefits they can receive from purchasing UCaaS …  There’s a value proposition that everybody looks at as a customer, and in UCaaS, there’s typically a 30-40 percent savings, but there [are] also …

… greater efficiencies, greater quality call, certainly access to the APIs or utilization of Salesforce.com and other services that these customers use.

So that value proposition is clearly driving customers to come to their partners, their partners being their trusted advisers … So the combination of all those things is clearly where we’re seeing that growth year over year and quarter over quarter.

CP: In the market, there’s the demand for UC and demand for UCaaS. Are you seeing much transfer of the UC side moving to UCaaS?

ZL: We do. Just look at the environment that we’re in. You or I saying we’re going to give up our iPhones and we’re going to go back to a pager? I don’t think that’s going to happen. I think we like the fact that we can carry this little device and it gives us so much power. In the software world in the UCaaS space, we get all of these incredible benefits, and it’s why there’s a transformation from premises-based into the cloud, no question about it. It’s the evolution, the new world of where we’re all heading and what we already are experiencing.

The customer is saying, “I want greater efficiency. I want a better value proposition. A I want greater call quality.” All of those things are customer-driven activities. So what that means in the channel community is, when you think about the ShoreTel-Mitel, Cisco and Avaya partners who spent the last 30 years-plus in the premises-based world, this is a new world to them, and we are working very closely in our recruitment efforts of those kinds of partners, giving them an avenue to bring their customers into the UCaaS space so that they can take advantage of that; otherwise, they’re going to lose those customers if that partner will not introduce them or bring them to the UCaaS side of the house. And we’re seeing that happen. It’s kind of like the motivation is either pain or gain, and I’d rather be a gain for the partner because the pain means they lost a customer to someone else that they could have sold.

CP: It sounds like there’s a lot of need for increased hustle out there with hungry competitors, and if partners don’t stay on top of things, someone else will slip in and take their deals.

ZL: It’s happening every day and for a multitude of reasons. Either that particular premises-based partner doesn’t understand, they do understand and don’t believe, they believe they still have time, [and/or] they’re relying on their maintenance agreements to carry the day, and no customer likes a maintenance agreement. There [are] no maintenance agreements with software, so the customers get what we give them — and that’s all there is.

It’s something we’ve been after for two years, and we’re making great progress, and as the true consultant we like to be, we’re helping those partners understand the why. So we are having great success in converting these ShoreTel-Mitel, Cisco and Avaya-type partners to our world so they can understand how …

… it works and how the compensation works, and just changing their outlook for the future, and quite frankly, giving them a future.

CP: With RingCentral’s ConnectCentral 2018 coming up next month, can you give us a sneak peak of the message and news for partners?

ZL: We’ve done a really good job of recruiting and supporting our partner base … and we’re taking it to another level. Obviously all of these partners have customer bases and they have customer bases that are legacy premises-based. Our initiatives that we’ve started now – and we’re gong to deepen and strengthen them as we move through [the fourth quarter] and into 2019, [are aimed at helping] these partners access their own customer bases through programs that we’re going to be launching and talking about when we’re at our ConnectCentral. But the key here is that the customer bases of partners need an opportunity to be educated. We have an opportunity to educate the customer so that the customer can make an educated buying decision on UCaaS when they’re ready. So it’s a little softer approach. The things that we’re going to be doing are going to allow those customers access to information through RingCentral. So think about webinars, calling campaigns and participation that partners will have. We want to be a trendsetter in the partner community to demonstrate that RingCentral is going to be the kind of partner that helps all partners become successful, but in particular those ShoreTel-Mitel, Cisco and Avaya partners to help them make this transition.

CP: How tough is that transformation for partners to UCaaS and the cloud?

ZL: Change is hard and it’s hard for people, particularly when you’ve been doing something almost the same way for 20-plus years. I’m selling premises-based, I’m looking at the margin I get and my profit margin is how I get paid. I get paid right now and then I get a maintenance [agreement], the same thing over and over. And now there’s the new world of monthly recurring revenue (MRR), long-term compensation that RingCentral pays for the life of the customer. So if you’re a partner of ours, we pay you a residual percentage of the monthly recurring revenue for the life of the customer. So it’s not only kind of an emotional transformation, but also financial because they’re accustomed to getting money now. Well, we’ve solved that to a degree by having compensation that also has an upfront component, and that’s what we call a SPIFF or upfront bonus. The speed by which they get that mimics what they’re accustomed to. So we pay three times the MRR upfront, so if it’s a $1,000 monthly recurring revenue deal; we’ll give them $3,000 per month plus the residual for the life of the customer. That helps mitigate the upfronts they’re accustomed to and gets them to transition into the business world of MRR. The partner community here at Channel Partners Evolution, 90 percent of them are on long-term residual plans — and let’s just say there [are] a lot of millionaires in this room.