RingCentral Inc. is a Belmont, California-based company that provides cloud-based business communication services to small, Medium-sized, and large enterprises. Founded in 1999, the company offers cloud communication and collaboration solutions, including voice, conferencing, SMS messaging, unified communications, web-based dialing, and fax services. It trades in the New York Stock Exchange (NYSE) under the ticker symbol RNG.
It boasts heavy investors such as Cisco, Silicon Valley Bank, Khosla Venture Partners, and Sequoia Capital. RingCentral’s valuation upon its IPO in 2013 was $789.7 million. The company had a market value equity of $20.377 billion as of September 2021, with 2020 revenues amounting to $335 million, a 32 percent increase year over year.
RingCentral derives its competitive advantages from its long-standing history in the industry and its vast feature-set. The company’s most direct competition comes from many smaller players, with larger players in the space providing a subset of its services.
Data from Synergy Research Group indicates that RingCentral is the market leader in the Unified Communication as a Service segment with a 20 percent share in a market that boasts a growth rate of 41 percent as of 2020, up from 27 percent in 2019.
RingCentral’s Business Strategy
Since its inception, consistency in growth has been at the heart of RingCentral’s business strategy. Its continuous innovation and a unified approach to enterprise communication make it the market leader it is today.
The firm’s product portfolio is extensive and divided into seven major categories: RingCentral Office, RingCentral Engage Digital, RingCentral Fax, RingCentral Engage Voice, RingCentral Glip, RingCentral Live Reports, and RingCentral Professional. This bundle of services extends beyond the company’s main expertise in cloud-based unified communications by incorporating security and information management solutions to complement the suite.
RingCentral incorporates several marketing strategies, including Search Engine Optimization, affiliate networks, content leads, Radio, tradeshows and events, sports sponsorships, and more to find and convert customers. The company values strategic partnerships with Alcatel Lucent Enterprise and Avaya, leveraging the alliance’s salesforce to target new customers.
Over the years, RingCentral has made several key acquisitions to strengthen its position in new markets. The company’s most recent acquisition is that of the technology and engineering team at Kindite to help advance the security and reliability of its services.
RingCentral SWOT Analysis
- Strong market presence: RingCentral still ranks as an established market leader despite the growing competition in the cloud-based unified communications space. Its heavy presence in the large enterprise market is projected to remain one of the top players in 2028.
- Diversified service portfolio: RingCentral believes in providing customers with the most efficient and well-rounded communication services. Therefore it has diversified its product portfolio to provide its customers with the most comprehensive services possible. Its focus on the larger enterprise market has become the go-to solution for businesses with complex communication needs.
- Efficient marketing strategies: RingCentral is very familiar with its target audience and how to capture their interest. Digital media is a crucial component of its marketing strategies, and the company has captured several loyal customers through content marketing. In addition, its search engine optimization techniques have given it a strong foothold in the industry.
- Scalability: RingCentral solutions can be deployed quickly, and it is easy to scale its services as a company grows. This enables the firm to offer a true one-size-fits-all solution, providing customers with complete autonomy over their communications without needing a dedicated IT team to manage the infrastructure. In addition, RingCentral is cost-effective and offers a wide variety of plans to satisfy customers of all sizes.
- Heavy reliance on third-party infrastructure: RingCentral’s main drawback is its reliance on third-party infrastructure to run its service. This makes its services vulnerable to outages from the third party, significantly impacting its customers. RingCentral partly relies on Zoom Video Communication to provide HD quality video conferencing to its customers despite introducing its own video conferencing. Remember, Zoom is one of RingCentral’s competitors.
- Intellectual property lawsuits: Accusations of violating patents constitute a significant concern with RingCentral. From time to time, the company was forced to indemnify its customers and resellers in lawsuits. This leads to potential service disruptions and customer dissatisfaction.
See also: Zoom Competitors Analysis 
- Growing market: The cloud-based unified communications industry is flourishing, and RingCentral recognizes the potential for this service to be even more widely used. The company capitalized on its early entry into this space by establishing itself as a leader in the industry. However, it will have to continue developing additional services if it wants to maintain its competitive edge.
- Newer technologies: While RingCentral is a market leader, it still has to keep up with newer technologies like Cloud computing and AI. Several key players in the space are already employing these technologies. This provides the company an opportunity to expand its reach and market volume through acquisitions of companies that possess cutting-edge technologies.
- Aggressive competitors: As the cloud-based unified communications industry grows, smaller players are entering the space with innovative services that can rival RingCentral’s services for a fraction of the market share. These companies can adopt new technologies faster than RingCentral, providing the latest services at little to no extra cost.
- Changes in US and Foreign tax laws: Any changes in US and Foreign tax laws will impact RingCentral and its customers. For example, changes in US tax law may force its customers to pay more taxes than expected, leading to the loss of customers. Foreign tax laws, on the other hand, could hurt RingCentral’s international revenues.
RingCentral Competitor Analysis
RingCentral competes in several market segments, primarily in small and medium-sized businesses as well as large enterprises. Its competitors include prominent industry players as well as smaller startups who tend to offer low-cost alternatives. This section analyses RingCentral’s top competitors in strategy, market positioning, differentiation, and offerings.
Microsoft Teams is a collaborative software of the larger software company Microsoft. Microsoft Teams competes in the same market segments as RingCentral and is a direct competitor in the enterprise market. It offers similar services and is compatible with other leading Microsoft products like Skype, Enterprise Mobility Suite (EMS), and Dynamics 365.
According to metrics from Statista, Microsoft Team’s user base increased from 75 million users in April 2020 to 145 million in April 2021. One possible reason for such an impressive rise in its user base could be the COVID-19 pandemic and the movement restrictions that followed. We could say the same about RingCentral, but the firm maintained a constant market share of 20 percent in the UCaaS market through the pandemic.
On the flip side, Microsoft Teams’ market share in the same segment over the same period (2019-2020) rose to about 10 percent. This speaks volumes about how much more effective Microsoft Teams is as collaborative software.
If it keeps up with the same trend, RingCentral better watch out.
However, it is essential to note that RingCentral has several differentiating factors. An example is its extensive market presence in nearly every country globally. Also, its deep vertical market expertise, compliance with regulatory, security features, and comprehensive enterprise-level functionalities give it a competitive edge.
Zoom Video Communications, Inc.
Zoom Video Communications, Inc. [NASDAQ: ZM] is a global video communications company. It provides its flagship video chat software, Zoom, to enterprises and large and small businesses. In terms of strategy, Zoom Video Communications is a direct competitor of RingCentral, offering similar services and competing for the same market segments.
Zoom Video Communications is a public company, and as such, it discloses its financial information. From its 2021 financials, Zoom made revenues totaling $2.651 billion, representing a 326 percent increase year over year. This makes Zoom the fastest growing company of its kind and one that RingCentral can learn a lot from.
However, it is essential to note that Zoom has grown immensely over the past few years despite having very little market presence in foreign countries. The US had initially been the only focus for its business model. Now it controls about 59.9 percent of its market share if a survey from EmailToolTester is anything to go by.
Zoom’s competitive advantages are its ability to scale resources quickly, its global presence in more than 100 countries, and the fact that it can maintain a comparatively low cost of operation. RingCentral has a slight advantage in market share and overall coverage, but Zoom is quickly closing the gap.
Vonage Holdings Corp.
Vonage [NASDAQ: VG] is a cloud communications company that offers virtual PBX, Hosted VoIP, and SIP Trunking services. It is a direct competitor of RingCentral, offering similar services and competing for the same market segments. Vonage is an international company with its headquarters in Holmdel, New Jersey.
Upon its IPO in 2006, Vonage raised $531 billion. Ever since the company has been a dominant player in the cloud communications market. Vonage competes fiercely with other big players like RingCentral, reflected in its slow but steady rise to the top. As of September 2021, the company had a market value equity of 4.11 billion.
From its financials, Vonage made $1.25 billion in its 2020 revenues, an increase from $1.19 billion in 2019. Its revenues are significantly higher than those of RingCentral, but a higher cost of operation also accompanies them.
One of the most distinctive characteristics of the company is its exceptional customer service. Many US customers have praised its trust and security protocols, particularly in professional organizations like industry publications, investment banks, and government agencies. This speaks volumes about how dedicated Vonage is to customer satisfaction.
Google [NASDAQ: GOOG] has its fingers in every pie, and it shows in its suite of messaging and collaboration tools. Among them is Google Meet, a direct competitor to RingCentral in the universal communication market. This tool is a Google Hangouts alternative that enables video conferencing, screen sharing, live presentations, and general co-browsing across devices.
Google is among the oldest and most successful of the technological giants, and it shows. It has more than one billion active users overall and 100 million daily users for its Meet services. Google Meet is a relatively new tool in comparison to its competitors. Still, it has been rapidly increasing in popularity, with about three million users joining the platform each day as per its executives.
RingCentral’s competitive advantage over Google Meet is that it has been in the market for a longer period and has built an impressive customer base. However, Google Meet enjoys the excellent infrastructure and resources of Google, alongside its integration with many other Google products.
Skype is a web-based application that provides voice calls, video calls, and messaging services over the Internet. It is an old player in the industry with more than 20 years of experience under its belt. eBay acquired it for $2.6 billion back in 2005 before spinning it off as a standalone company in 2010 and was valued at $2.75 billion upon its IPO the same year.
Microsoft made the bold move to acquire Skype for $8.5 billion in 2011. This made it one of the most expensive acquisitions in Microsoft’s history. However, Microsoft needed to stay ahead in the game in such a competitive landscape, and Skype was its ticket. We can say a lot about Microsoft’s success since the Skype acquisition, but Skype’s declining market share, especially in the Video Call platform segment, speaks for itself.
Despite the increasing demand for video calls and its inherent role in business, the platform lost about 25 percent of its market share between 2020 and 2021. Statista estimates Skypes registered user base to be around 1.68 billion in 2020 and 1.8 billion in 2021. However, this does not reflect its active user base as it only registers about 40 million active users every day.
RingCentral’s market share of video calls is considerably impressive. However, Skype’s registered user base is significantly larger, and if Skype leverages this through aggressive marketing and promotions, it could easily take away a hefty chunk of RingCentral’s user base.
How RingCentral Stands Out Against Its Competitors
RingCentral’s competitive advantages are apparent in its market share numbers, especially for Unified Communications as a Service (UCaaS), the leader with a 20 percent market share. Through its high-quality services, RingCentral managed to distinguish itself from its competitors in quality, reliability, and features.
Moreover, it is an open platform that encourages collaboration between different applications and offers an extensive and robust application programming interface (API). This was a crucial advantage in increasing business productivity, enabling various applications on the platform.
What’s more, is that RingCentral has gone above and beyond with its customer service. Its users don’t just get help when they’re stuck; they can ask questions about products, services or even seek advice from experts who are always willing to assist them. This has been a lucrative advantage for RingCentral as it has established itself as a client-oriented and reliable platform.
Its generous 30-day free trial and flexible pricing plans (including customizable packages) also played a huge role in its growing user base and market share. However, despite its leading market share, RingCentral still has room for improvement. Its pricing plans might not be as competitive as those of other players, especially when some of its competitors, such as Google Meet, offer their services at no cost.
RingCentral Competitor Analysis (FAQs)
Question: Who are RingCentral Competitors?
Answer: RingCentral competitors are companies that offer similar services. This includes video conferencing, audio calls, chat, package forwarding, and many more. Its biggest competitors include Microsoft Teams, Zoom, Google Meet, Slack, and Cisco Spark, among many others.
Question: Are RingCentral and Zoom the same?
Answer: Zoom and RingCentral are two different companies; however, they offer services often confused. While RingCentral focuses on making communication more efficient for businesses, Zoom is a video conferencing platform created to enhance collaboration in business.
Question: Who is Better Than RingCentral?
Answer: RingCentral is a market leader when it comes to Unified Communications as a Service (UCaaS). Still, other companies like Microsoft Teams, Google Meet, Zoom, and Cisco Spark are well-established players.
The future for this industry seems bright; global revenues are projected to grow at a compound annual growth rate (CAGR) of over 10 percent by 2027. Regardless, RingCentral still has room for improvement to maintain its market share and dominate the industry.
RingCentral’s biggest threat comes from the combined forces of Google and Microsoft. They not only have their existing user base to leverage on, but they also have a better and cheaper service with Google Meet and free calling features in Microsoft’s Skype.
Zoom, on the other hand, has seen impressive growth in popularity since the COVID-19 pandemic struck. The industry will benefit from the increasing number of virtual meetings in this day and age, so RingCentral has a lot to think about.
- Dan Bilzerian Bio - December 9, 2022
- OLA Model Explained - November 23, 2022
- Service Value Chain Explained - November 23, 2022