8×8 CEO Change: Is CCaaS Now Its Priority?

As David Sipes departs, a change of strategy seems afoot

8x8 CEO Change: Is CCaaS Now Its Priority?
Contact CentreNews Analysis

Published: December 1, 2022

Charlie Mitchell

8×8 has terminated the employment of CEO David Sipes with immediate effect.

In will step former CFO Samuel C. Wilson to fill the void.

After the announcement, many quickly jumped onto social media to share their disapproval of the news.

A former colleague of Sipes at RingCentral noted: “8×8’s loss…. He is a great leader!”

Another declared: “David Sipes is one of the industry’s good guys.”

Unfortunately, 8×8’s stock has tumbled in recent times. After reaching a market cap of almost $4BN  – under Sipes’s leadership – it now sits at $480MN.

As such, many reports speculate that the board simply lost its patience with the decline.

Yet, there is perhaps more to this story.

“All of the comms vendors have seen the same [stock drops] during Sipes tenure,” writes Zeus Kerravala, Founder and Principal Analyst at ZK Research, on LinkedIn.

From my discussions with industry folks, this was about a difference in strategy. The board wants to move to a CC-first approach where Sipes has been focused on having UC lead XCaaS.

Of course, the move also elevated rumors of a RingCentral takeover. Yet, dig deeper, and Kerravala’s argument gains momentum.

A Possible Change of Strategy for 8×8

Over the past 12 months, 8×8 messaging has centered on its XCaaS philosophy.

Such an approach aims to “erase the boundaries between UCaaS and CCaaS.”

In doing so, the vendor has begun to spin more contact center technologies into unified communications. Its Conversation IQ tool is an excellent example of this.

Many analysts have given plaudits to this approach. For example, Blair Pleasant, President & Principal Analyst at COMMfusion, stated:

XCaaS should be the lead – customers can start with UC and add CC, or vice versa, or at the same time. That’s 8×8’s differentiation.

Yet, such thinking perhaps clashes with current business priorities.

Indeed, AWS leads the CCaaS market in customer acquisition without any native UCaaS tools.

Meanwhile, stalwart contact center vendors – including NICE and Five9 – focus on CCaaS innovation above all. Yet, they satisfy this CC-UC convergence trend by aligning their CCaaS platforms with Microsoft Teams.

In doing so, these brands are – to an extent – defying the current macro environment.

Recognizing this, 8×8 will likely pivot its approach and focus more time and resources on CCaaS – especially considering the many opportunities in the space.

Vendors Sense An Opportunity In CCaaS

In October, Genesys ditched its Multicloud CX solution, leaving a chunk of its CCaaS base with no option but to migrate to its public cloud solution or look elsewhere.

Moreover, many vendors are attempting to poach customers from Avaya’s impressive legacy base.

NICE and Five9 have enjoyed significant success in seizing these opportunities, with each of the latter’s biggest three deals in Q3 coming from Avaya’s former clients.

Notably, both vendors posted successful quarters of growth.

As a result, 8×8 is perhaps eager to capture a piece of the pie.

Moreover, by focusing its innovation efforts on CCaaS, 8×8 can increase revenue per seat.

In UCaaS, this is not necessarily true, as the market is more mature. Innovation does not necessarily move the needle in ARPU.

Consider how often Zoom or Slack has released a new feature, only for Microsoft to introduce a version of its own shortly after. Every new UCaaS innovation quickly becomes standardized.

Sipes recognized this in his XCaaS vision. Yet, the 8×8 board likely wants to grab the CCaaS market – which reports suggest will double in size in 2023 – by its horns to open up growth opportunities.

As Kerrevala concludes: “This would require bringing in a CEO with a CCaaS background.”




Brands mentioned in this article.


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