8×8 Wins "Watershed" Deal With Regus

Worldwide Deal Likely Worth Millions in Revenue

UC provider 8×8 announced late yesterday what it’s calling a “watershed” deal to provide communications systems to Regus plc (RGU.L), the world’s largest provider of temporary office space. The deal, likely to be worth millions of dollars a year to 8×8, marks a major endorsement of cloud-based unified communications (UC) technology by a large enterprise, 8×8 Chief Marketing Officer Enzo Signore told the Daily Cloud.

“This is a watershed moment in enterprise communications,” Signore said. “In the past, enterprise communications as a service [i.e. delivered from the cloud] was typically adopted by small and medium sized companies with less than 1,000 employees who didn’t demand the enterprise-grade quality and 5 nines (99.999%) reliability that enterprise companies expect. We’ve made a big investment in enabling large companies to deploy unified communications and if Regus is moving 100% to the cloud, many other companies will be saying it’s time to do the same thing.”

Headquartered in London, Regus operates 2481 locations in 896 towns and cities in 106 countries. In August it reported revenue of £937 million ($1.42B) for the first half of this year, and also said it opened 231 new locations in that period. Signore said that 8×8 will roll out its cloud-based UC systems to 140 Regus locations in the U.S., U.K., and continental Europe in the first phase. Once that’s complete, which he said could be in the first half of next year, 8×8 will begin rolling out its service to the rest of Regus’s worldwide network.

8×8 technology will replace a polyglot network of on-premise PBX systems from Cisco (CSCO), Mitel (MITL) and Avaya, Signore said. Regus wanted new systems so it could offer features like local number portability, mobile to deskphone interoperability, cellular to WiFi interoperability, web conferencing and videoconferencing. All those features are difficult if not impossible with a traditional PBX system. In addition, Regus has many large corporate customers such as Toshiba, Salesforce.com, and Danone. With the new UC systems, large customers can create a “virtual PBX,” giving them four-digit dialing for their international Regus-based networks.

Bake-Off

Regus began by selecting five leading vendors, whittled that down to two, and then conducted a trial or bake-off in three cities, Signore said. 8×8 won for three main reasons, Signore said. First was 8×8 systems’ ability to offer seamless transferability across mobile and landline networks, second was its global reach, and third was the reliability of its systems. 8×8 currently operates resources in nine data centers, including five in North America, two in Britain, one in Hong Kong, and one in Sydney, Australia. Signore said. 8×8 may need to open additional data centers in markets like Latin America to serve Regus, he added. “It depends on a lot of variables like number of lines and traffic,” Signore said. “We’re working collaboratively with Regus and we’ll grow with the customer.”

Signore wouldn’t comment on the value of the deal. However, it’s likely to be worth millions of dollars a year next year and until the rollout is complete. 8×8 reported quarterly revenue of $47.9 million for the quarter ended in June and it announced the Regus deal after the stock market closed yesterday because it considered the deal potentially “material.”

8×8 said it expects to announce more large deals in the coming months. “We’ve seen some nice enterprise traction recently,” Signore said.