Avaya partners RingCentral on cloud transformation

Avaya partners RingCentral on $500m cloud transformation

04 October 2019 | Natalie Bannerman

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Avaya has entered into a strategic partnership with RingCentral on a new cloud offering worth at least $500 million.

Through the exclusive partnership, Avaya will introduce Avaya Cloud Office by RingCentral (Avaya Cloud Office), a new global unified communications as-a-service (UCaaS) solution.

Avaya Cloud Office, due for launch Q1 2020, expands the company’s existing portfolio to offer a full suite of UC, CC, UCaaS and CCaaS solutions to a global customer base, which includes more than 120,000 customers, over 100 million UC lines and 5 million CC users in over 180 countries.

“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 (pictured), president and CEO of Avaya. “This also gives us the opportunity to unlock value from a largely unmonetised 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.”

Avaya Cloud Office combines RingCentral’s UCaaS platform with Avaya technology, services and migration capabilities to create a highly differentiated UCaaS offering.

“This strategic partnership leverages the respective strengths of Avaya and RingCentral to provide a definitive differentiated solution,” added 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.”

RingCentral is contributing $500 million to its partnership with Avaya, including a $125 million investment of 3% redeemable preferred equity that is convertible at $16 per share, representing an approximate 6% position in Avaya on as-converted basis. RingCentral will also pay Avaya an advance of $375 million primarily in stock for future payments and certain licensing rights.