Leadership change comes as the company expands its business cloud communications capabilities
Rory Read, currently chief operating executive at Dell Technologies and president of the company’s Virtustream cloud business, will take over next as CEO of Vonage, a player in the fast-growing and highly competitive cloud communications space.
The Lowdown: Read, who also led chipmaker AMD and has executive experience with Lenovo and IBM, will take over for Alan Masarek, who has been Vonage’s CEO since late 2014, the company said this week. Masarek will help Read with the transition.
The Details: Vonage started out as a consumer business, but under Masarek’s direction has moved to position itself as a commercial-focused cloud-based communications provider on the strength of its Communications Services Platform, which offers everything from video and messaging to voice and chat.
During the first quarter, as the COVID-19 pandemic began to take hold around the world, service revenue from Enterprise Applications customers – those with more than $120,000 annual recurring revenue (ARR) – jumped 21% year-over-year, with that of midmarket plus Applications customers (with more than $12,000 ARR) growing 14%. Such midmarket customers accounted for 64% of all total bookings for the quarter, up from 62% the previous quarter.
By contrast, revenue from the consumer side of the business fell 13% during the quarter. Vonage is conducting a strategic review to determine whether to divest the consumer unit as it pursues the goal of becoming a pure-play business Software-as-a-Service (SaaS) company.
The Impact: As Vonage expands its business communications efforts, it increasingly finds itself in competition with the likes of Microsoft Teams, Cisco, and Zoom in a cloud-based collaboration market that has seen demand skyrocket as many employees shifted to working from home in light of the coronavirus outbreak. Gartner analysts are forecasting that spending on cloud-based webconferencing solutions will increase 24.3% year-over-year in 2020, driven by the public health crisis.
Background: In his five years with Dell, Read has held a range of executive positions, including COO and executive vice president of Dell’s Boomi management business. He also was executive vice president and chief integration officer for three years, playing a leading role in Dell’s $67 billion acquisition of EMC in 2016.
Prior to joining Dell, Read served four years as AMD’s CEO as the company sought to regain its competitive footing against rival Intel. Before that, he spent five years with Lenovo as president and COO, a job that came after 23 years with IBM.
The Buzz: “This is truly an exciting time to be joining Vonage,” Read said. “The need for businesses to accelerate their digital transformation through communications is expanding at an unprecedented pace. Vonage’s Communications Services Platform brings unique value through the integration of multiple communications channels – video, voice, messaging, chat, and verification – into customers’ applications, products, and workflows. This delivers both the power and the flexibility for our customers to create new emerging paradigms in their industries, and enables the type of business continuity, remote work, and remote delivery of services that is so critical in today’s environment.”
“It has been my absolute privilege to lead Vonage over the past several years, and I am incredibly proud of everything our team has accomplished together,” Masarek said. “Transformations of this magnitude are enormously challenging, and we achieved our objective of reinventing the company and becoming a global leader in business communications while building a truly talent-driven culture. I am honored to have worked with so many talented colleagues.”
“Rory is a technology industry veteran with a unique background and strong understanding of SaaS and software. He is a proven leader and the ideal CEO to drive Vonage into its next era of growth,” Vonage Board Chairman Jeffrey Citron said. “Under Alan’s leadership, Vonage transformed from a consumer service provider to a leading business communications provider operating under a unified, flexible integrated platform. We are grateful for Alan’s vision and leadership in propelling the company forward and laying the foundation for our future growth and success.”