Michael Funk: That was very helpful and certainly look forward to host you next week in Boston for the NDR. So, I look forward to seeing you then.
Sonalee Parekh: Same here. Thank you.
Operator: The next question is from Samad Samana with Jefferies. Please go ahead.
Samad Samana: Good evening. Thanks for taking my questions. It’s kind of a multiparter as well. So, on the new products, Vlad, big expansion of the portfolio. But they touch up against at least some of what your ISV partners also provide if I think about sales, events, how should we think about maybe where you fit into the ecosystem versus some of the companies that you partner with? And then certainly, just what are you assuming for UCaaS versus CCaaS versus other maybe as we think about 2024 ARR growth just because there has been kind of just big differences in the growth rates? Thanks to both of you.
Vlad Shmunis: Yes, hi Samad. Yes, look, no, great questions. Look, when you’re saying some of the companies we partner with, I assume you’re referring to RingCX vis-a-vis RingCentral Contact Center, which is hosted by NICE inContact. So, assuming I have the question right. Look, they are designed to address different segments of the market and different use cases. By and large, NICE inContact is a well-established enterprise leader. They are able to — and have proven success in hosting multi-thousand seat contact centers with very complicated use cases. And they sell a very nice niche in the upper end of the market. So, we have this integration with them that’s multiyear old. And it obviously has been quite successful for us and for them over the years and we stay committed to that relationship.
Having said this, we clearly see an opportunity at the bottom end of the market as well as maybe even with some of the larger customers, but with simpler, more streamlined workflows. And this is where we saw an opportunity to come in with a differentiated product. That’s simpler to use, simple to deploy, a lot more cost-effective. We truly are positioning it with disruptive pricing. And people are taking notice. And we are — I think we mentioned we’ve doubled the number of logos in about three months. So, we’re happy with that result. We already have some larger customers in the thousands of seats, frankly, that was a pleasant surprise for us, but success — breeds success. And look, it’s very early, but early signs are pretty positive. So, for now, we believe that the two will coexist.
Sonalee Parekh: So, Samad, just to answer your question about UCaaS/CCaaS bookings growth breakdown. So, firstly, you know we don’t specifically guide on bookings and certainly not bookings or growth by product. But I can just give you a bit of color there. We do believe and certainly embedded in the guide and the comments I made earlier about we think we do see upside to where we’re guiding. We believe we can grow faster than the market for each of these markets. So, when I talk about the market, I’m talking about third-party data where UCaaS is sort of mid-single. We think we could grow significantly above that. And then for CCaaS, I think the market, again, it’s below 20% in terms of what third-party data is saying. And certainly, RingCX will be well above that. But overall, we believe we will grow faster than the market in both of those segments.
Operator: The next question is from Kash Rangan with Goldman Sachs. Please go ahead.
Kash Rangan: Yes. Vlad, you talked a lot about new products, et cetera. What does the new product direction of RingCentral look like over the next few years? Where do you see untapped opportunities for innovation that can get the company back to reaccelerating growth, as Sonalee pointed out? And it’s always good to see founders being involved in the business. At this stage, it’s good to have you back. But founders, I’m sure, you will agree more than anybody, Vlad, are not satisfied with the single-digit growth rate. I mean they’re inherently growth people. So, how do we put that — put your new product strategy in the context of your real aspirations for the company and what are the things that you could be doing differently in the next few years? Thank you so much.
Vlad Shmunis: Right. Yes. Look, so we are, I would say, at the early stages of executing on exactly the strategy that you’ve outlined. So, we are now — and frankly, for what I remember, really maybe for the first time in our existence as a public company, we are now actively talking about NPIs, new product introductions, and about becoming a multiproduct company. I can tell you that it sounds simple, for sure, you have one product, what’s another one to add. It is actually a big deal, okay, to go from a single product where you have a sales force trained to sell one particular solution, where you have product people who are specialists in one particular area and only that particular area, where your technology base only needs to address one use case, support, et cetera.
So, everything now needs to be done several times over, which is a heavy lift. But we think that juice might be worth the squeeze here because it opens up new TAMs for us, largely expands our cumulative TAM. And very importantly, provides us with a new buyer personas. So, your addressable market increases as well in addition to the TAM increasing, okay? So, if you look at our just recent introductions, look, we’ve had — we’ve reintroduced or introduced RingCX just last quarter, okay, and it already has over 100 logos. We have repackaged Events — RingCentral Events, that was also last quarter, and we’ve announced a very major win — we announced a very major win with Harvard today. That’s a big deal. That was a head-to-head win against a very well-known and well-funded competitor, let’s say, okay?
So, we think that these are early signs of successes to come. If you think about it, the goalpost that we’ve set of $100 million in two years, from these new products, it’s meaningful. And I guess you can say, well, RingCentral is a $2.3 billion company was it worth another $100 million. But $100 million is a big deal, okay, because it’s as of today, if we had that, it would be for additional points of growth. So, that by itself would put us into double-digits and this is early. So, core belief here is that by redoubling on new products, not introductions, I mean, we cannot be introducing the product per quarter. That would be a little bit hard to manage. But RingCX gets squarely into the cloud contact center market, which is large, growing faster than the traditional UCaaS market.
So, it will be a growth driver. Events is a completely different buyer persona for us. We are now able to sell to marketing departments and sales departments and something that we’re never able to do with our traditional products. o, we believe that’s going to be a meaningful business. And meanwhile, we see continued stability in our base. We are able to gain substantial new logos, both in SMB and enterprise. I already covered that. So, I think I believe that all of this will be adding up. And I’m optimistic that we can, over time, get back into double-digit growth, even as we cross the $2.5 billion mark and beyond that. I mean it’s a heavy lift, but we do have a strong team. And most importantly, we have — we are playing in markets which are still grossly underpenetrated.
And we are one of the large and profitable companies — one of the few large, profitable companies for playing in the space.
Operator: The next question is from Ryan Koontz with Needham. Please go ahead.
Ryan Koontz: Thanks for question. I want to ask about the competitive environment and the shift toward AI features and new products. And how are you seeing that shift impact the decision criteria of your customers and maybe just want to buy UCaaS or CCaaS you’re seeing that on the forefront? And how is it changing the types of competitors you bump into, whether it’s legacy player or maybe like Zoom or Dialpad that’s more focused on AI? Thanks.
Vlad Shmunis: Yes. Well, look, I’ll just speak about ourselves. I won’t comment on what Zoom or Dialpad or anyone else is doing. I would maybe question a little bit saying that any of them are more concentrated on AI than we are. We do see ourselves as an AI-first company. RingCX, in particular, is leveraging our RingSense technology, which is our AI platform and that is having very good traction out there. Our growth is very much in my mind at least. My understanding is very much tied to specifically, it being an AI-first product, okay? And look, AI in a way is a great equalizer. With AI technologies, we can go against industry incumbents. And we don’t need to replicate the entire feature set to be competitive just because the way that people approach, for example, customer service is radically changing with availability of LLMs and IVAs and just as a game shift from, hey, let’s empower or power up more agents versus let’s handle more transactions at quality, but save companies money by letting them reduce their contact center staff.
So, we think that for RingCX, in particular, it would be a great tailwind. Same for Events, okay, which is the two products we’re highlighting. Again, it is absolutely ripe for AI innovation. And we’ll have a lot more to say about both of these and some more at Enterprise Connect, which is coming up next year. Now, as far as our core product is concerned, look, when all is said and done, why do people buy RingCentral given the other options in the market? And the answer is to me at least, is relatively straightforward. So, as they buy us A, because we’re stable, we’re always up. We have five to 6.9s [ph] availability for many years and counting. And for — we are being told, this is absolutely industry best, okay? So, this is one reason. Second reason is we are global and regulatory-compliant across the world.
Wherever we are allowed to do business, and there are still some countries that are closed, unfortunately, for example, China. So okay, we’re not going to be a regulatory-compliant and we’re not offering services there either. But everywhere else, we’ll check all the boxes. So, companies large and small can be — can feel safe from that perspective for using us or reselling us, okay? Then there is — then there is feature set, okay? And we’ve said that we pioneered the space. We’ve been added for the longest. We simply have more features and more integrations than anyone else out there, and that includes even some of the larger competitors that you can easily think of, okay? And very importantly, it’s our commitment to data privacy. We are religious about our customers’ data just as we are about our data.
And that is a commitment coming in from the highest levels. And it’s just something that our customers don’t tend to be concerned about is data privacy or our commitment to security. So, this is why people buy RingCentral. Now, what does it have to do with AI? If you take all of that and overlay AI on it, then you simply get a more powerful solution, okay? People, given our size and our status in the field, people don’t need to buy RingCentral for AI alone, okay? But if you combine this industry-leading, stable, global, secure platform with state-of-the-art AI capabilities, then we think you have something that’s quite differentiated. And that will truly take us into this decade and beyond. I don’t know when the next magnitude of innovation will happen that could compare with what we are now experiencing with AI.
