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Amazon Web Services and RingCentral Tag Team in Cloud Communications

This week, RingCentral and Amazon Web Service (AWS) announced a strategic agreement where the latter will offer RingCentral MVP and RingCentral Contact Center to its customers. This adds to the long list of partnerships that RingCentral has, but AWS is the first cloud communications provider to take a bite from the RingCentral apple. Its previous partnerships were designed to either flip a legacy install base (Mitel, Avaya) or give service providers (Verizon, Vodafone) a way to compete with the UCaaS and CCaaS providers.

While it’s true that AWS has its own UC application, Chime (formerly Biba), the company has never positioned that as an MVP competitor. Rather, in true AWS fashion, the Chime SDKs and APIs are targeted toward developers that want to integrate UC capabilities into applications. The partnership with RingCentral gives them a full-featured, Gartner MQ leading product to sell to its customer base. Given the secular trend of UCaaS and CCaaS convergence, this makes sense and gives AWS some options. It could sell customers its own contact center solution, Amazon Connect with RingCentral MVP, or it could sell an all-RingCentral solution.

One might wonder why an AWS salesperson or would sell a RingCentral contact center since they could sell Connect since it’s a directly competing product. The addition of RingCentral as an arrow in the AWS sales quiver is designed to give customers choice. Connect is an excellent product but it’s generally sold through developers and uses utilization-based pricing. Those factors have a strong appeal to many customers but not all. If the customer wants a fuller-featured, traditional contact center, RingCentral is a better option.

The AWS credo of “do what’s best for the customer” is the reason the company has maintained its lead over Azure as the top cloud provider. The sales force will sell whichever product meets customer demand best. If an AWS product has an issue, it is up to the product team to fix them or its likely that sales of it will be low. With many large vendors, some solutions do well just by pushing it into the sales channel. However, if the product is bad, that will eventually come back and bite the vendor as customer satisfaction will be low.

As part of this agreement, RingCentral products will also be made available through the AWS Marketplace. Again, it may seem counterintuitive that AWS embraces competing products in its Marketplace but this falls in line with the above customer-first sentiment. The Marketplace is where vendor quality and differentiation shine through. Last year, I had a discussion with AWS about the Marketplace and they told me that there are over 1600 companies available through that channel and all of them complement the existing 200 AWS native services. As customers use the products, they can score and review the products, similar to what’s done with Amazon’s consumer business. This model generally leads to the best product winning and ensures that vendors keep up the pace of innovation.

Another interesting aspect of the partnership is that the two companies will work together to develop vertical solutions for Healthcare, Financial Services, Retail, Education, and Public Sector. Think of these as industry-specific versions of MVP and contact center. While the channels and tools might be common across the different verticals, the way they are used are different from industry to industry. For example, in K-12, teachers need hierarchical control for remote learning to ensure students are turning off their cameras and doing something else. Also, being able to integrate into other educational systems can streamline processes.

For RingCentral, this partnership has a tremendous amount of potential given the reach AWS has. The company has looked to use partnerships to fuel its growth and has had mixed results to date. Part of the issue is that selling cloud isn’t a natural motion for some of the legacy vendors, so RingCentral needs to do a fair amount of work upfront. There is perhaps to vendor better at selling cloud services than RingCentral so this partnership should hit the ground running.