Domestic UCaaS Providers Continue Global Push
As cloud communications providers move upmarket, they must extend their geographic reaches.
One of the biggest UCaaS trends in the coming years will be geographic expansion, as vendors look beyond the North American market toward global domination in order to grow beyond the mid-market. Large enterprises demand in-country points of presence globally, regional data centers to avoid transoceanic VoIP issues, and, in many cases, local service.
Many of the "born in the cloud" UCaaS vendors gained significant traction by targeting U.S.-based SMBs with fewer than 50 users. As these cloud providers gained success and market share, they began moving upmarket, targeting mid-sized organizations, followed by larger enterprises with offices and headquarters in various regions around the world. For UCaaS and other cloud UC vendors, moving upmarket also means moving out to various geographical regions.
Becoming a global UCaaS provider requires more than just global reach and call termination in various countries. Local sales and support, local partners, and language localization are critical. Vonage noted the distinction during a recent discussion about the global UCaaS market, saying, "There are a number of very basic regulatory and structural differences from the U.S. For example, ... calls to mobile phone numbers are charged at a higher rate. Calls to international destinations are much more frequent than in the U.S., and therefore are vital to include in any UCaaS offering."
In addition, Vonage said, "other key regulatory requirements include the need to source local DIDs in each country. These DIDs need to be compliant with local emergency services requirements and other regulatory needs such as number porting and lawful intercept. Some countries, such as Germany, have specific and more stringent demands. In most countries, any operator will have to be registered with the local regulator. In addition to telecoms regulation, there are a number of data protection and privacy regulations to be considered."
Whether by opening data centers or establishing local sales offices, many UCaaS vendors have been expanding their offerings and actively pursuing global organizations. Some UCaaS providers, such as Fuze, have been focused on enterprise and global companies since the beginning, while others, like Nextiva, are just starting to expand operations to European markets.
Here's a brief rundown of how four UCaaS providers are serving global and multinational businesses.
8x8 has been actively expanding globally, beginning by entering the Canadian and U.K. markets in 2013, Hong Kong in 2014, Australia in 2015, and South America in 2016. The company currently has 15 data centers in six regions serving customers in more than 150 countries, as well as seven customer support centers offering 24x7 follow-the-sun support. The company has offices in the U.S., the U.K., Romania, and Australia, plus localization in 14 languages.
The U.K. market has been especially strong for the company. As CEO Vik Verma noted in a recent earnings call, "One of our largest enterprise deals, carrying a total contract value of approximately $7 million, came from our U.K. team, which continues to enjoy excellent traction in the market, specifically in the public sector with local and central government opportunities."
As part of its global efforts, the company restructured its go-to-market organization in late 2017, introducing a global small business and e-commerce team and a global mid-market and enterprise team. The goal is to build a completely integrated organization and common set of products, as well as provide local language capabilities for global businesses. The company also introduced a next-generation global channel program.
RingCentral has been actively growing its global capabilities, and now has 17 data centers around the world and direct peering with more than 45 carriers. In 2016 the company introduced its Global Office service, designed to enable a multinational enterprise to appear local to customers in different countries, while acting as one integrated business. The service is available in more than 35 countries in North America, Europe, and Asia Pacific. Language support is available in German, French, and English (U.S. and U.K.). Another service, RingCentral Office for Europe, provides businesses in 13 countries with full access to the RingCentral suite of products.
"We took our baseline technology model that was in the U.K. and launched it in 13 other European markets in March 2017. We had to deal with telco regulations in Europe country by country," RingCentral explained during a discussion about its global offerings. "We provide a complete localized service wrap, including language support, feet on the ground, and people on the phone for pre-sales and post-sales deployment. We work with different channel partners to appear local and global," the company added.
Local language support is available in French, Spanish, Italian, and German, and the offering includes regulatory compliance as well as emergency calling services.
Based on its recent merger with Ireland-based Blueface, Star2Star has quickly expanded its global offerings. Star2Star was looking for an international partner and has been working with Blueface on large, global enterprise opportunities for the past year. Blueface, which has customers throughout Europe, including Italy, Spain, Germany, the U.K., and Ireland, was looking for a route to market in North America, while Star2Star needed a way to grow its global business.
"A lot of customers and wholesale carriers need one provider with deep local expertise in countries where they do business, so merging the companies made sense," Blueface CEO Alan Foy told me in a recent briefing. "We now can become a global leader in UCaaS. We have the full technology stack and are looking for acquisitions for local sales presence in different regions of the world."
The merged company will expand its operations in Asia Pacific, South America, and Africa, and plans to scale the business and better grow its presence in these regions.
Blueface will leverage Star2Star's go-to-market channel, rolling out the company's partner model in Europe. "We're focused on building our presence and brand globally, and will open new offices with local presence, data centers, support, etc. in different regions," Foy said.
Vonage offers services to U.S.-based enterprises in 13 European countries, with an international focus on the U.K. It has data centers in the U.K., with others planned as the company looks to expand to other European countries.
Vonage opened its new European headquarters in London's Silicon Roundabout in September 2017. Its in-country marketing has primarily focused on the U.K., with customer acquisition in other areas primarily coming from multi-nationals. Vonage has used a direct go-to-market strategy in the U.K. based on a marketing-led lead generation strategy with a dedicated inbound sales team based in Prague, in the Czech Republic.
Vonage provides support in multiple languages from a Prague-based call center. A key part of its international strategy is providing straightforward price packages, offered on a 12-month contract via a simple sign-up process with overnight delivery from quote acceptance and "plug and play" endpoints. Vonage is also expanding its efforts in Germany, and recently named a new head of country to "lay the groundwork for continued expansion of our unified communications business throughout Germany and other European countries," Vonage CEO Alan Masarek said.
Vonage's customers in Europe include long-distance carpooling service BlaBlaCar, interior design company Jonathan Adler, and global shared workspace provider WeWork.
Expanding its enterprise sales teams, Vonage recently opened offices in China and Japan, adding to its Asia Pacific footprint in Singapore, Hong Kong, and South Korea (Seoul). The company boasts Asia Pacific customers such as Tencent, Huawei, WeChat, and others.
The global market will be the next frontier for UCaaS. Whether you're a U.S.-based business expanding overseas, or a large multinational enterprise with headquarters across the globe, the cloud is getting ready for you.
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