Round and round we go, where the cloud communications space stops nobody knows. This highly contentious and quite crowded market is one that tends to favor the bold. And this week, one could say a couple of its larger names came together.
Avaya (News - Alert) and RingCentral have announced a strategic partnership, which results in Avaya Cloud Office by RingCentral. The UCaaS offering expands the Avaya armory, makes RingCentral (News - Alert) the exclusive provider of UCaaS solutions to Avaya and will drive cloud migration.
“Avaya and RingCentral’s joint investment and commitment to bringing Avaya Cloud Office to market creates an unprecedented opportunity to accelerate the transition to the cloud with attractive economics for our customers and partners,” said Jim Chirico, President and CEO of Avaya. “This also gives us the opportunity to unlock value from a largely unmonetized base of our business as it brings compelling value to our customers and partners. We believe this highly complementary partnership is a game changer that expands the total addressable market for Avaya and creates meaningful value for both Avaya and RingCentral.”
In specific, the partnership empowers Avaya with a complete suite of public, private and hybrid cloud. In terms of cold hard cash, RingCentral is contributing $500 million toward the pairing, which includes a $125 million investment of 3% redeemable preferred equity convertible at 16$ per share – giving RingCentral about 6% position in Avaya.
“This strategic partnership leverages the respective strengths of Avaya and RingCentral to provide a definitive differentiated solution,” said Vlad Shmunis, Founder, Chairman and CEO of RingCentral. “We are excited to bring RingCentral’s leading UCaaS platform to Avaya’s installed base of over 100 million users and over 4,700 partners, providing long-term growth opportunities for both our companies.”
The announcement comes from two firms that fit nicely together. While Avaya has been in the communications space for some time, the past few years hit the provider hard with financial issues and Chapter 11 bankruptcy but like the phoenix, it rises again – with a cloud communications leader at its side.
Edited by Maurice Nagle