Vonage is the billion-dollar behemoth that has, in the space of five years, shown remarkable success in making a transition from a residential VoIP service provider to a leader in the high-growth field of Communications Platforms as a Service (CPaaS). A year ago, I characterized its offering as “defining the full-stack for Conversational Commerce” by orchestrating a series of acquisitions dating back to 2015 with the acquisition of Vocalocity and culminating with the purchase of CCaaS specialist NewVoiceMedia in 2018. Since that time, it took one step further by bringing over.ai into the mix which, as I explain here, serves to “speed up the time it takes for an enterprise to launch sophisticated, voice-based virtual agents to handle high-impact use cases.”

In a day-and-a-half Analyst Event, Vonage’s top executives marched through major changes that spell a coherent approach to growing “TAM” (Total Available Market) in the highly-competitive but largely inchoate world that combines CPaaS, CCaas and UCaas. Two messages came through loud and clear:

• VBC (Vonage Business Cloud) is a single solution to the communications needs of medium-to-large enterprises, including contact centers, conferencing, “bots” and POTs.
• Partners and resellers see a real advantage to Vonage’s new approach as a single-source CPaaS with deep roots in basic telephony

Sunsetting the legacy “Orange” branding acknowledges the inevitable. Legacy, residential services now account for only 30% of top line revenue for Vonage and was characterized by CEO Alan Masarek as “a melting ice cube” that will continue its decline. On the negative side, the decline in residential service revenue has masked the rapid, and impressive growth that Vonage has seen from its business offerings. On the positive side, Vonage is one of the few, if not only, pure-play in the public cloud that is profitable, both historically and in the foreseeable future. Its acquisition phase is largely over and it is paying attention to execution, meaning consolidation of its capabilities into a unified platform under a single brand – Vonage Business Cloud (VBC).

In the world of Conversational Commerce, Twilio stands out as VBC’s direct competitor. When going after share of enterprise spending on contact center, collaboration and communications, the list is much longer. CCaaS alone adds Genesys, Cisco, Amazon Connect, Five9 8×8, RingCentral/Avaya along with newcomers like Edify and Thrio. In the midst of all this competition, Vonage’s secret weapon will be its microservices marketplace (formerly known as Nexmo) and the flexibility that its platform affords for both customers and go-to-market partners as they seek a combination of cloud-based solutions that fulfill on business case-driven use cases that add Marketing and Sales to the classic Contact Center applications. VBC, by design, is well-suited to compete well for its share of the Conversational Commerce TAM.

Categories: Intelligent Assistants