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Alcatel-Lucent Enterprise Announces Q2 Performance

On August 25, 2020, Alcatel-Lucent Enterprise (ALE) announced its Q2 performance. As expected, the impact of the pandemic across key ALE geographies (France, Southern Europe, Latin America, and North America) has impacted the organization’s revenue. For Q2 2020, ALE saw a 17% decline year over year (YoY), despite reporting an operating profit from reducing operational expenditure in Q1. However, while the pandemic has decreased performance in on-premises system deployment, ALE cloud-based services are seeing significant growth.

Key takeaways from ALE’s Q2 performance for Unified Communications (UC) include:

  • In small to mid-sized businesses, on-premises systems decreased by 55% YoY during Q2. This was due to many of ALE’s key geographies being under lockdown, limiting in-person interactions and deployment.
  • ALE’s cloud-based services registered 51% revenue growth YoY for Q2. Rainbow UCaaS licenses increased by around 100,000 new users, and OpenTouch Enterprise Cloud increased growth by 29% YoY for Q2.
  • The total number of ALE cloud users at Q2’s end was over 2.676 million.

Other ALE news included the launches of Rainbow UI (a Rainbow chat service for partner websites) and a new Rainbow data center in Australia.

Our Take

ALE’s Q2 performance perhaps comes as no surprise. We would expect on-premises deployment to suffer during a global lockdown, leading to cloud-based solutions thriving. Indeed, if we didn’t see revenue increases for ALE’s Unified Communications as a Service (UCaaS) offering, Rainbow, we would be justified to wonder what might be going wrong.

ALE’s performance maps onto the current trend of the UCaaS market continuing to eat up the private cloud and on-premises UC solutions. As Omdia’s latest research suggests, while UCaaS currently occupies just under a quarter of the UC marketspace, it is clear that the effects of the pandemic are rapidly shifting UCaaS’s influence. With remote and hybrid work likely here to stay, we should expect to see ALE’s Q3 performance reflect further revenue increases for its cloud-based services and losses for on-premises deployment.

Source: SoftwareReviews Unified Communications as a Service Data Quadrant.

For Info-Tech members who want to start leveraging the benefits of a cloud-based telephony system, use our process in Modernize Communications and Collaboration Infrastructure to modernize your legacy private branch exchange (PBX) system. While SoftwareReviews’ data does not rate ALE’s Rainbow as a market leader in the UCaaS space, Rainbow performs well for ease of data integration, ability to adapt to market changes, and availability and quality of training. Indeed, for small to mid-sized businesses with a skills deficit in the shift to a UCaaS solution, Rainbow ought to be shortlisted.

Source: SoftwareReviews Alcatel-Lucent Rainbow Scorecard. Accessed September 7, 2020.

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