Unify-Atos Connects with RingCentral
Earlier this year, Atos expanded its portfolio with RingCentral. It seemed odd at first as Atos had acquired Unify along with its UC portfolio back in 2016. However, Unify had very limited UCaaS services, and SI Atos needed UCaaS in its quiver. So, Atos and RingCentral in an SI relationship made sense. They also announced a plan to create a co-branded UCaaS offer. Tada! the companies announced today: Unify Office by RingCentral.
RingCentral has done this a few times now, and the deal has some similarities with the partnerships it has struck with Avaya, AT&T, BT, and Telus. As usual, the solution is co-branded, unaltered, and exclusive. That is, Unify Office by RingCentral will have the same features and capabilities as RingCentral Office (as well the other RingCentral co-branded services). Atos intends to differentiate its offer through its SI capabilities. That will include supporting existing Unify handsets and migration tools for its premises-based customers.
It’s a potentially lucrative arrangement for both companies. The goal is to migrate the Atos-Unify installed PBX base which is estimated at 40M users (RingCentral currently has about 2M UCaaS users). Also, the Atos UCC division will adopt Unify Office. I am not sure how large the division is, but Atos has 110K employees and reported revenue of €12B in 2019.
Unify Office will be initially launched in Atos’ primary markets: France and Germany with plans to expand in NA (and more) later this year. Germany was surprising as to my knowledge RingCentral doesn’t have a data center there. Vlad Shmunis (Founder, Chairman and CEO of RingCentral) assured me the new offer will be compliant with local requirements, but did not provide specifics. Avaya maintains its own Avaya UCaaS service in Germany.
The news is a good fit for Atos, but signals changes for its Unify division. First, it means that Unify will not pursue its own UCaaS offer (due to RingCentral exclusivity). It presumably means that Atos won’t be selling Google Voice (or at least to the Unify base). Atos is also a major partner for Microsoft and Google, so presumably the exclusivity only relates to the installed Unify base. It also means the end of new sales of Circuit.
Unify joins a long, distinguished list of premises-based vendors that were unable to organically solve UCaaS. When hosted PBX was a new concept, there was legitimate debate if the existing PBX makers would make the transition. This wasn’t the first big transition for these companies, most of them had already survived other transitions including analog to digital and then digital to IP without major shakeouts. The PBX companies knew enterprise telephony better than anyone, had customers and channels, and offered complementary hardware. There was early optimism that the premises-based vendors would dominate the cloud, and many downplayed the transition as nothing more than a deployment option.
It turned out to be more than that, and proved to be a very different business. Premises-based vendors didn’t have the support structure (7×24 or self service), onboarding tools, or the business model that could leverage channels. None of the premises-based companies have been able to leverage their UC know-how to into an organic transition into UCaaS. Many of these vendors are gone or exited the space (Aastra, Ericsson, Nortel, ShoreTel, Toshiba, and more) and those that remain made key acquisitions such as Cisco/BroadSoft, ALE/SIPWise, and Mitel/ShoreTel (Mitel acquired ShoreTel which bet it all on its transition to UCaaS — and lost). The others all struck go-to-market partnerships: Avaya and Unify with RingCentral and NEC with Intermedia (the one that got away from RingCentral).
Atos ending the sale of Circuit is a sad outcome. Presumably, Circuit has to go since it overlaps with Glip or the messaging component of Unify Office. Circuit was the first messaging-centric communications solution I saw. Here’s a video I took from its Analyst Preview in 2013. It was so radical that I didn’t fully appreciate it at the time. This was well before Slack or Teams existed (and before Unify existed). Evidently the Siemens Enterprise board didn’t get it either, and Ansible was nearly smothered pre-birth. Under new leadership, Ansible was launched in late 2014 with the unfortunate name of Circuit.
I admit that names are tough, but “Circuit” did not invoke images of progressive, mobile-first, text and multi-modal communications. The name was just one of several factors that squandered its first-mover advantage. Nonetheless, I’ve been a fan of Circuit. Over the past seven years, Atos/Unify created a highly innovative solution. Circuit always had a lot of potential. It was even briefly available to NEC customers and featured in the NEC booth at Enterprise Connect 2019.
RingCentral and Atos kept the details at a high level — which is also consistent with RingCentral alliances. I don’t have the impression that funds or IP were exchanged as was the case with Avaya-RingCentral. My guess is some of those upfront fees is what caused NEC to get away.
Update: Although I clearly inquired about the transfer of intellectual property with Atos and RingCentral execs, I could not get a clear answer. The final press release states “RingCentral will acquire IP from Atos including a portfolio of certain patents.” I am happy about this. There was a lot of great IP in Circuit that could and should be utilized. It’s clear that RingCentral is aligning with competitors, but less clear that is simultaneously acquiring valuable IP (and sometimes associated revenue).