NICE 1CX: A “Market-Shattering” UCaaS Platform or a RingCentral Rebuke?

As a CCaaS stalwart stepping into UCaaS, NICE has flipped the enterprise communications script. Here’s why.

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Published: July 9, 2024

Charlie Mitchell

At last month’s NICE Interactions event in Las Vegas, the CCaaS stalwart launched a UCaaS platform: NICE 1CX.

The offering is a full-featured communication suite – with unlimited telco usage – at what NICE termed a “market-shattering” price of $5 per user per month.

Indeed, that’s much lower than other platforms on the market. Consider Microsoft Teams. Its Essentials and Phone offering – with domestic calling – costs $16 per user per month when paid annually.

Yet, despite that difference, it’s doubtful that lots of large enterprises will work with a conventional CCaaS player to spread UCaaS across their organization. Instead, they’re more likely to opt for a more familiar offering, like Microsoft Teams or Zoom.

As such, it’s unlikely to be “market-shattering” in the enterprise.

However, this could resonate in the midmarket, especially with existing NICE customers, given its high brand loyalty and the platform’s low price point.

Moreover, while enterprises still fall back on vendors like NICE, Genesys, and Five9 for CCaaS, midmarket customers are increasingly asking for a single-vendor solution in their RFPs.

The likes of RingCentral, Webex, and Zoom have built out their own CCaaS offerings to address that opportunity, which NICE hadn’t been able to do… until now.

A Challenge to UCaaS Vendors Stepping Into CCaaS?

Upon releasing 1CX, NICE argued it would be easier to disrupt the UCaaS space as a CCaaS vendor with price than vice versa.

Zeus Kerravala, Principal Analyst at ZK Research, agreed. “For the most part, people will tell you that UCaaS has become a bit of a commodity, and a lot of the products look the same,” he said in a LinkedIn video. “So, it’s hard to differentiate.

In CCaaS, that’s a very important product. That functionality deals with companies and customers. So, disrupting there and making that a commodity has become much less likely.

That said, Zoom has succeeded in slipping into the CCaaS space, seeing its midmarket and enterprise contact center deals spike by 246 percent year over year (YoY).

RingCentral has also enjoyed a promising start to its CCaaS journey, adding 100 contact center customers in Q1 with its RingCX platform.

However, both have sunk significant funds into their CCaaS innovation cycles, releasing 100+ features a quarter to deliver a worthy platform.

In the case of NICE, it has delivered a full comms suite in one release.

Of course, when solutions are low-cost, customers can dismiss them out of hand and question their quality.

However, NICE’s move into the space is disruptive in the midmarket and could encourage other CCaaS vendors to innovate and respond.

After all, Talkdesk is the only other high-profile CCaaS-first brand to have introduced its own UCaaS solution, and two years after its release, it is still voice-only.

A Rebuke of RingCentral and RingCX?

NICE and RingCentral have many mutual customers, with the latter selling the former’s CCaaS offerings to its enterprise UCaaS customer base.

Yet, late last year, RingCentral released RingCX as its own CCaaS platform.

Still, the vendors work closely with one another. Indeed, NICE remains the CCaaS vendor of choice for many within RingCentral’s broad enterprise UCaaS base.

Yet, according to Dom Black, Principal Analyst at Cavell, the release of RingCX and now NICE 1CX reflects a fundamental change in their partnership. He wrote on LinkedIn:

[NICE 1CX has] very aggressive pricing and [the] potential to put [NICE’s] partnership with RingCentral under threat, although their RingCX solution is similarly competitive to the NICE relationship.

Meanwhile, Jon Arnold, Principal Analyst at J Arnold & Associates, shared a similar sentiment.

“I think it reflects the dynamics of the marketplace,” he told UC Today’s Big News Show. “If RingCentral can go for contact center solutions, NICE can go for UCaaS. As partners, they can’t afford to stand still when changes like this occur.”

So, while the word “rebuke” may be a little harsh, the release is perhaps a reaction to RingCentral’s – and its UCaaS rivals’ – move into CCaaS.

Moreover, the market “dynamics” that Arnold refers to may include the rise of CRM platforms converging on the CCaaS space. This is pressuring CCaaS vendors to expand the definition of what they do, so they don’t become marginalized as voice plug-in providers.

This UCaaS integrated approach allows NICE to do that and reinforces its message of CXone as the most comprehensive CCaaS platform.

After all, UCaaS is not the only market that NICE is expanding into. The vendor has also bolstered its journey orchestration, conversational AI, and interaction intelligence solutions.

As NICE and its CCaaS competitors make such moves, their messaging may switch from platform to suite – a shift that more enterprise tech providers in adjacent markets, like CRM, have made.

At NICE Interactions 2024 in Las Vegas, NICE also released MPower. For more on this offering, read our article: NICE Mpower: Is It Really the “Holy Grail” of CX?

 

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