Vonage Update: CEO and VP Sit-Down
We had the occasion recently to sit down with Alan Masarek, the CEO of Vonage as well as Jeff Savage, VP for Enterprise Sales at Vonage for Business last week. In an informal gathering, we covered a lot of ground. The Vonage that many of us know started in the consumer space (co-founded by well-known IP Telephony visionary Jeff Pulver). Who hasn’t seen the zany “whohoo” TV adds that have been running for a few years?
As Alan pointed out, the consumer offerings of Vonage are extremely strong and continue to generate strong cash flow. Yet, the trend continues for consumers to drop land lines (even low cost IP service) in favor of mobile service. Clearly, landlines remain a declining market, and Vonage’s consumer business is a part of this trend.
So, Vonage management has pivoted, and through a series of acquisitions, has established a strong presence in the Enterprise Market for IP Telephony and Unified Communications. These acquisitions have included Vocalocity, Telesphere, Icore, SimpleSignal and GUnify. Through these deals and other partnerships, Vonage hosts SMB users on the Vocalocity platform and large enterprises on Broadsoft. This multiple platform approach for different market segments seems to be the standard approach in the industry allowing low cost offerings for SMB’s as well as full featured offerings for the larger business.
As many of us at BC strategies discuss weekly, the standard Enterprise Voice/UC offerings are increasingly difficult to differentiate. Perhaps with a nod to this, recently, Vonage announced the acquisition of Nexmo, a leading Cloud Platform as a Service (CPaaS) company. Although it may not have the name recognition or sales of better known competitors such as Twilio, the Nexmo client portfolio is extremely impressive including Amazon Web services, KLM and Uber. For these customers, Nexmo is the underlying platform that allows ‘in application’ chat, voice, verify, SMS, and big data that consumers are beginning to expect. We believe it leaves them well positioned in this space going forward.
We have interviewed and “tested the waters” with Vonage engineers and management prior to this around their designs, redundancy, resiliency, SLAs, security, survivable remotes, best practices, QoS, and UC features and functions offered among others. They have not disappointed. They have built the business side towards both SMB and large enterprise, and have shown that they meet our criteria for uCaaS enterprise level in the above areas. This is not always the case among their competitors.
An additional takeaway was the commitment of management to remain flexible and provide customized solutions to the market for large enterprises. If you’ve recently dealt with Tier 1 providers, you’ll recognize that this is not something that you’ll typically find.
We have been impressed with Vonage and their “enterprise standards” approach for delivering on the promise of a true five 9s model with a significant set of UC feature functionality, and expect to continue to see such an approach for those enterprises considering a uCaaS cloud solution. In our opinion, they “get” the real-time aspect of real-time communications and want to deliver on a best-in-class model. Other models and vendors we have taken a look at do not necessarily meet this grade.
uCaaS vendors can vary considerably amongst those competing in this marketplace. In our opinion, Vonage Business is taking the right steps towards designing and delivering on uCaaS for enterprise grade reliability and commensurately is making strategic acquisitions that will enhance both their product and future releases. At just under $1B in annual sales, they appear to be making the right moves at the right time. Let’s see what the next 12-24 months brings with the changes, disruptions, and acquisitions of notable “players” taking place in this cloud market growth segment.