In this theCUBE + NYSE Wired: Mixture of Experts segment from the New York Stock Exchange, theCUBE’s John Furrier sits down with Raj Verma, CEO of SingleStore, to unpack how the intersection of technology and finance is shaping enterprise strategy. Verma shares why SingleStore is “on course” for the public markets, reflects on brand-building through the company’s partnership with golf Hall of Famer Padraig Harrington and connects that ethos to how SingleStore helps organizations fix struggling data “swings.” The discussion zeroes in on what’s next as Wall Street watches the AI infrastructure buildout: after chips and systems, the software and data layers set the pace for value creation.
Verma outlines why enterprises must modernize “brown” data estates into “green” ones to safely bring corporate context, governance and compliance into LLM workflows via RAG – and why commoditized data-at-rest puts the advantage at the query layer that unifies data in motion with data at rest. He predicts agentic AI will gain reasoning capabilities in roughly 18 months, cites industry indicators like Google reporting ~25% of its software now built by AI and argues that high switching costs will give way to disruption as buyers reassess legacy vendors. The conversation closes with concrete momentum: ~33% YoY growth, ARR in the ~$135M range, gross dollar retention ~98%, cloud NDR ~130, ~50% of business now in the cloud, landing ~3 new customers per day, a path to cash-flow breakeven in the next two quarters and a teaser for AI-related announcements in the next two months. Listeners will find notable stats, real-world use cases and forward-looking views on how databases power reliable AI at enterprise scale.
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Kira Makagon, RingCentral & Zeus Kerravala, ZK Research
In this theCUBE + NYSE Wired: Mixture of Experts segment from the New York Stock Exchange, theCUBE’s John Furrier sits down with Raj Verma, CEO of SingleStore, to unpack how the intersection of technology and finance is shaping enterprise strategy. Verma shares why SingleStore is “on course” for the public markets, reflects on brand-building through the company’s partnership with golf Hall of Famer Padraig Harrington and connects that ethos to how SingleStore helps organizations fix struggling data “swings.” The discussion zeroes in on what’s next as Wall Street watches the AI infrastructure buildout: after chips and systems, the software and data layers set the pace for value creation.
Verma outlines why enterprises must modernize “brown” data estates into “green” ones to safely bring corporate context, governance and compliance into LLM workflows via RAG – and why commoditized data-at-rest puts the advantage at the query layer that unifies data in motion with data at rest. He predicts agentic AI will gain reasoning capabilities in roughly 18 months, cites industry indicators like Google reporting ~25% of its software now built by AI and argues that high switching costs will give way to disruption as buyers reassess legacy vendors. The conversation closes with concrete momentum: ~33% YoY growth, ARR in the ~$135M range, gross dollar retention ~98%, cloud NDR ~130, ~50% of business now in the cloud, landing ~3 new customers per day, a path to cash-flow breakeven in the next two quarters and a teaser for AI-related announcements in the next two months. Listeners will find notable stats, real-world use cases and forward-looking views on how databases power reliable AI at enterprise scale.
Kira Makagon, RingCentral & Zeus Kerravala, ZK Research
Zeus Kerravala
Founder & Principal AnalystZK Research
Kira Makagon
President & COORingCentral
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John Furrier
>> Hello, I'm John Furrier with theCUBE here at our NYSE Studios on the East Coast. Of course, as part of the NYSE Wired community, of course, we've got our Palo Alto Studio connecting Wall Street and Silicon Valley. This is our mixture of experts series where we talk to the leaders shaping the industry, AI infrastructure applications. Here is the president, CEO of RingCentral, of their big investor meeting, and Zeus is here. He is guest and hybrid host. We're going to really discuss the earnings and the investor meetings and also what's happening with RingCentral, how that relates to what's happening in the big wave of AI and ultimately the transformation going on. Zeus, good to see you. Kira, thanks for coming on.
Kira Makagon
>> Thanks for having me.
John Furrier
>> You had a hell of a week. You had earnings and now the investor meeting. How'd that go?
Kira Makagon
>> That was great. We just showcased our new product portfolio, emerging product portfolio, which is AI-centric and we call it agentic voice AI-centric to a number of investors. We had our customers on panels, we had our partners on panels, and they listened. They were there for a couple of hours and a lot of-
John Furrier
>> Business is good?
Kira Makagon
>> Business is great. We just announced our quarter numbers. Business is great. We beat our numbers for the quarter, both on top line and margin, and our new products are growing very rapidly, now approaching and on target to exceed a hundred million in revenue for all the AI-based products and not that many companies in the world today, for all the AI hype that can say it's $100 million business.
John Furrier
>> Yeah, that's not hype. That's reality.
Kira Makagon
>> That's reality.
John Furrier
>> Zeus, you're a CUBE Collective member, and I appreciate you putting this interview together because this is where you're starting to see the signal from the noise, where you start to see the business performance. We go to a lot of investor meetings and analyst meetings together. So what's your take? What's your analysis?
Zeus Kerravala
>> I think the segment that RingCentral plays in is still maybe the single most misunderstood aspect of AI. I think a lot of investors rode the cloud communications wave up during the pandemic and frankly got out of it, took the profits and haven't really looked at it since. And I think when I talk to a lot of the investors, there's a lot of things they don't understand. The feeling is voice is in decline, that AI is going to take all the jobs, and every customer I talk to, it's the opposite. You think of contact centers, they can't hire enough people. They're chomping at the bit to get AI agents to close that gap. Kira and I were talking about this, AI is driving really a voice renaissance where everything we interact with now we do through voice. And so the big global network that RingCentral has for voice actually becomes a competitive advantage. And I just think that from an investor perspective, this whole sector is still very misunderstood.
John Furrier
>> Misunderstanding is when this transitions and well, yeah, transitions. You win in transitions. Here as a leader, this is an opportunity and the voice has been called the killer app because we all know the voice prompts, but voice as in general is never going to go away. But at the same time, if you look at all the wireless growth and all the internet traffic, the data set growth is massive too. So in the old days, optimize for voice, optimize for data. If there's a renaissance in voice and a massive tsunami of more data coming, how do you balance the data-centric architecture? I mean, a lot of people are trying to figure this out. Do I rotate to data-centric architecture or voice or is it all data to you? How do you guys look at that? Kira, we'll start with you and Zeus, I'd to get your thoughts.
Kira Makagon
>> Well, voice is the richest, most ubiquitous form of data. It conveys emotions, it conveys content. It's our most natural form of expressing ourselves is voice. And voice is now actually, is having that renaissance moment because now you can turn the dark matter behind voice into light matter. You can lit it up, and that's what we're doing. We're lighting it up with our technology that we're bringing to our customers and we like to describe it in the following fashion, we like to describe that we take voice and throughout the conversation journey in pre-conversation, during the conversation, and post the conversation. For that, we have products, our AIR, AVA, and ACE products, the family products that we announced, they address those stages of the conversation. So that's a continuous loop of data that is lit up by us, by our technology now we put in the fingertips of our customers so they can drive business outcomes.
Zeus Kerravala
>> Yeah, I think what Kira's talking about too is maybe one of the most exciting aspects of this market right now is a lot of contact center managers and even just talk about voice being dark data.
John Furrier
>> What does that mean? What does that mean, dark data?
Zeus Kerravala
>> You're doing a ton of calls, but none of it you could turn to data, but now with AI, you can in real time convert voice to real time data and be able to use that as part of your data set to analyze customer sentiment or employee segment sentiment. So if you've got a bunch of customers calling and complaining about a product, you would never have known that before because every call is in isolation. Now all that voice becomes data. And in fact, even from a translation perspective, you can translate in real time. It's just that we've never had access to real time voice before. Now we do.
John Furrier
>> So Kira, that's what you meant by lighting it up. You're lighting up the dark data, dark matter and making it valuable.
Kira Makagon
>> Exactly, yeah.
John Furrier
>> Okay, so that means I answered my question then. Everything's data-centric, because you're turning voice, well, spoken word into data, but there's also the user experience with agents coming on. I mean, I go, "Hey Siri, what's the weather today in New York?" I get an answer. So there's a whole other side of the voice. The voice is an interface
Kira Makagon
>> Voice, this is the interface, voice is the new UI. That's what people are saying out there. And indeed it is, because you've got people talking to people, you've got people talking to agents, you've got agents talking to agents. Ultimately, how we human beings interface, it invoices the most natural form for us. And so we try to enhance, light it up and make it delightful. Make it delightful for customers talking to businesses, businesses serving customers, and managers observing what's going on in the business.
Zeus Kerravala
>> And Carol, one of the things that you and Vlad both talked about was with RingCX, that brings almost like a contact center-light capability to a bunch of companies that couldn't access it before. So you think of the big iron contact center vendors, school systems, small retailers are never going to use it. Now with RingCX, you can actually deliver customer experience information to companies that couldn't afford it before, didn't have access to it. And so when you think about that from a business perspective, what's that do to your TAM? It's got to just-
Kira Makagon
>> The TAM is huge. The TAM, the addressable TAM-
Zeus Kerravala
>> It's all in TAM.
Kira Makagon
>> Yeah. It's being uncovered and the estimates go from, they grow 60 billion, 100 billion. It's essentially not well-estimated except that it's in very high numbers and these numbers keep on increasing. Why do they keep on increasing? Because what we're finding out is how to make jobs that today are cumbersome, easier to do, and so you need less training. Now, somebody is going to benefit from that less training, and that comes in forms of technology that's being provided, and that is our products that basically assist human beings or replace human beings where that's needed. For a small business, for example, that's looking to hire another receptionist and may not have money to do that, our AIR product, AI receptionist is a perfect product for that, especially because a doctor can set it up. And we had customers today on the panel that described how essentially the receptionist set up a receptionist to replace themselves of ours. And the net of it was that they were able to take now 30% more calls, those 30% more calls translated for them, small business, in $1.7 million worth of business per year and she's expecting that to grow. That's just one simple example of how we make things that were not even affordable, didn't exist before now affordable for businesses enhancing how they perform, and of course we increase our share of wallet. So the market for this is immense. And going into more sophisticated use cases for that, you can imagine that on steroids in larger companies who are now, instead of only selling them a communication system or a contact center system, which is what we are good at and known for, and we're the biggest out there in voice, nobody matches us, to date in the world for quality, reliability.
John Furrier
>> I mean, when you're hiding in plain sight, it's important. I remember covering the unified communications industry when I started SiliconANGLE 17 years ago, and that evolved from the PBXs of the world and then it became kind of communications. Now cloud brings it to another level, and now AI brings it to another level, which means that the category, the TAM changes. It's not the same Magic Quadrant that it was years ago.
Zeus Kerravala
>> .
Kira Makagon
>> Yeah, yeah.
John Furrier
>> And in fact, most successful companies that I interview in the AI era are often misunderstood and they're the ones making the most progress.
Zeus Kerravala
>> Yeah, actually bring up a good point. We were talking about that on investor day where when Ring Central first came to market, that cloud you see that you talked about was really the value prop was wrapped around PBX replacement. You got an old outdated system, move it to the cloud, but for the most part it was a like-for-like replacement. Now with a lot of the capabilities you're bringing in, the value proposition isn't like-for-like, it is business transformation and some of the customers that you had there talking about how just they're able to do things they could never do before.
Kira Makagon
>> Exactly. Yeah. I mean, essentially we call it do more with less, but really creating business value. At the end of the day, our job is to deliver value to our customers and to drive customer value and increase our share of wallet and to do that continuously, we have to do more for our customers. And how do we do more? We do that with our base products, RingEX and RingCX, and really putting AI as the layer, as the layer or interface layer on top of that such that every interaction, every interaction is now either assisted or analyzed or both of these and preempted when it doesn't have to take place by a human being. And we had customers today on our panel and our channel partners as well who were saying that essentially it's transforming their business. So we're more now in the business of transformation of how customers operate.
John Furrier
>> It's interesting, because when you're talking, I'm thinking to myself, wow, you've actually converged knowledge systems with call center dark data and you're the company brain because it's a critical frontline touch point. If you combine that with say, what we're seeing with search, whether it's helping find information. I did an interview with a small town in the US, small IT department and the age, the humans can take a phone call and know everything what was in the council meeting the day before, and actually quote regulations, questions like they have a superpower because they can bring data to the table. That enables the agent market, which is now in this case behind the scenes, but you're just getting the raw data ingestion, giving that value. Where's that value extraction for you guys? Because now you're essentially brought a whole nother data set into the knowledge systems.
Kira Makagon
>> So in fact is the agents take phone calls on our system at the same time the system shows them potential scripts as to how to best answer the questions. It provides, it gives them guidance right away. It allows their managers to suggest to them better answers, analyze all of that in real time, summarize it, transcribe it, put it into whatever system of record that they need to put it at, and then really create out of that the insights that we talk about so that they can understand how to run their business better.
John Furrier
>> Okay. So I want to ask both of you guys this question because I brought up the Magic Quadrant, it just popped in my head, but I think there's really no Magic Quadrant that fits kind of what we're talking. It's a little bit horizontal. So the question is, you guys were the pioneers in on-prem to SaaS, now there's the SaaS to agent infrastructure. What's your vision and what's your analysis on this? Because now you open up the aperture of value creation and extraction. So one, is there a category of AI? And how do you look at the business model implications?
Kira Makagon
>> There's reports coming out almost every once and they're sort of getting upgraded, updated, so to speak, with new data points because it's changing so quickly. And there's categories of AI conversation intelligence. Every vendor out there that carries any kind of a communication product has AI modules. Really, it's going to boil down to how customers consume this and it's evolving, it's rapidly evolving.
John Furrier
>> Yes, we should put a CUBE quadrant together because you could be at the center of that.
Zeus Kerravala
>> Look, John CUBE's got to be nice because they're in a lot of the Gartner MQs. The fact is, those decision tools that are in the space frankly are very outdated. They're rear-facing. A lot of the criteria they use doesn't really give a company like RingCentral benefit for.... Because you said it best. It's the center of gravity for this stuff, which means you not have to provide the core communications capabilities. But there's a whole bunch of adjacencies around that, how you manage the workforce, quality management, how you score CSAT. Ring announced a couple of new products here today. They've built a lot of those out, but none of that gets counted in the Magic Quadrant. And I think this is a case where in fact, even the-
John Furrier
>> What would you call it? What would you call, what category would you call it? I mean, make one up. Because the AI transition from cloud to AI means it's hitting more value points. And so that's not cloud, but it's cloud scale. Now it's data scale.
Zeus Kerravala
>> Yeah, it's really-
John Furrier
>> Putting him on the spot here.
Zeus Kerravala
>> Really intelligent converged communications, because it's employee and customer facing, and it's got AI that analyzed that to help you understand everything from back office to front office. And so Gartner's historically treated those two things the same or those two things separately. You have employee communications, customer communications, but especially when you get into the midsize customers, those are all the same people. And so to try and separate them and create this-
John Furrier
>> It's interesting because just riffing a little bit on this one point, because I think it's clear that if you look at the AI and the NVIDIAs of the world, they nailed training in the big AI factories and inference is the killer. We look at the edge devices, they have inference at the edge, but no training. So what I think of what RingCentral does, you're getting real time new data coming in. I mean, it's new. It's not like synthetic data. It's real new data that hasn't yet been trained, but it comes in, you're turning it into value. So that's instant net new signaling from customers.
Kira Makagon
>> Yes, exactly. And that's the beauty of RingCentral being RingCentral is because the first point of contact for a customer to a business is RingCentral. And you need that fiber. And now we're, like I said, we're lighting up that fiber by understanding what's being transpired, that point of communication so that you can immediately, just like you said, the models are being trained. Well, the models here are listening to the conversation in a secure privacy-aware way, but for that particular customer, it can add value to the conversation. And it could be very simple. I could be simply on the phone and I'm having the conversation, AI is taking notes for me, AI is analyzing what I need to do next. AI is depositing it someplace else, and then AI is setting tasks for me and send me a reminder that after this conversation, I got to go back and call this customer a week later.
Zeus Kerravala
>> Yeah, yeah. I think nothing underscores that point though more than, and John mentioned frontline, the category of tools you built historically, it's with targeted knowledge workers. More and more I'm seeing RingCentral and your peers go after the frontline worker who have never had access to tools before, and those are the employees that sit between back office and front office.
Kira Makagon
>> Exactly.
Zeus Kerravala
>> And again, when you talk about TAM expansion, I think I saw a data point, only 20% of the workers are knowledge workers. The rest of the 80% we've not given any good tools and it's an undertapped, underappreciated market.
John Furrier
>> Yeah, the tooling and platform conversation, I love that because your platform with tools, agents are coming in. Kira, share the momentum. I know you have the earnings call, these public stuff out there, but just generally for the folks understanding the value of RingCentral, I certainly now get it 100%.
Kira Makagon
>> Yeah. Over the last two years since we started tracking what we call new products, all of the AI-based products, we've gone from essentially zero in revenue in those products to on track surpassing 100 million this year. So that's zero to 100 in two years. There's not many startups, the unicorns can't do it.
John Furrier
>> That's escape philosophy trajectory.
Kira Makagon
>> It's escape philosophy. If you look at the adoption of curves from these different products that we have in the market today, if you look at the adoption curves by customers in terms of number of customers, they all look like this. They look exponential. And we're just starting. We really are just starting because customers are still learning. Customers are still asking questions like, "What do I do? What exactly does this mean? We hear this AI thing, but what can it do for me?"
John Furrier
>> And how do you translate into priorities from your focus and you're executing the growth plan? What's the focus? What's your optimization plan?
Kira Makagon
>> Excellent question. What are fundamentally, we're a product company, so we are thinking what are we spending and how are we allocating our capital? And our golden asset is our technology people, our product people. We spend about a quarter of a billion dollars on our products and technology organization. More than half of those dollars are now going into these new products, our agentic voice AI studio products, portfolio of products covering our RingEX, RingCX portfolio of companies, all of our multi-product platform. That's immense number of dollars and that dollar amount is going to increase. Now, behind that, we have an army of salespeople, highly trained salespeople that are all being trained to sell these products. And so that army is now unleashed out there on our customers and future customers. That's dollars being spent by us, Ring Central, a $2.5 billion company to grow our TAM with these new products.
John Furrier
>> And you're accelerating and enabling a data mode for your customers to have a competitive advantage. New products are going to emerge for them.
Kira Makagon
>> Exactly. Well, exactly. Those who are adopting our products quickly and learning how to use them, learning how to take advantage of that. I'm just giving you a stat for a small business and I can give you a lot more stats. Business side reporting, 30% increase. Small business improving, 30% increase in their intake of opportunities, leads. More mature businesses are coding efficiency in their customer support departments and having to do again, more with less, not having to hire, not having to train, not having to deal with churn. That all translates to better customer experiences and more revenue for our customers.
John Furrier
>> Zeus, the tray's behind us. Yes.
Kira Makagon
>> Yeah, yeah.
John Furrier
>> RingCentral, calls. calls. You guys are a listed company at the NYSE. You rang the bell three times. Tonight will be your fourth.
Kira Makagon
>> Excited.
John Furrier
>> What's it like to be an NYSE listed company?
Kira Makagon
>> It's been great. Look, it is been wonderful. It's been wonderful to be up there. It was absolutely exhilarating the first time, and I expect it'll be just exhilarating today the first time around.
John Furrier
>> Zeus, summarize RingCentral folks evaluating. It's obviously the numbers don't lie. They got financial success. Their product-led growth is kicking in just the beginning, she said, so what's your take on all this?
Zeus Kerravala
>> To me, it's a company and transformation within an industry and transformation. I think the entire industry benefited from COVID, but in a lot of ways I think it hurt you in the long run because it took priorities away from things you would've done differently had that bubble not come. And so we're just catching up now. But I think from an investor standpoint, I'll go back to what I said. I think the value that communications plays in digital transformation is largely misunderstood by the investor community. In fact, when you talk to anybody in AI, talk to NVIDIA, they'll say the low-hanging fruit is in customer service and being able to transform that. And so who does that better than RingCentral? And so I just think there's, if you're to ask me what inning we're in John, the transformation here, I think the pitcher's still warming up.
John Furrier
>> Kira, give you the last word here on theCUBE here, as the trades are flying here on the option floor.
Zeus Kerravala
>> That's Kira's account.
John Furrier
>> As someone who's taking the company public again, you had your anniversary here, now you're celebrating your fourth ringing here. You're in the AI wave. You guys have made successful transitions. What's your advice to other leaders who want to harvest the AI wave, harvest, the value that's created? How do they think? Is there a mindset? Can you share your thoughts on how other leaders should think about their business?
Kira Makagon
>> Yeah, so it's the megatrends of all megatrends. It's moving faster than the internet and it's real. It's actually creating real value. This is not something hypothetical, so you have to embrace it. You have to take it a step at a time, but you got to move. This is moving fast, and if not moving, you're going to be left behind. And so you got to think differently and learn, learn fast and adapt and not be afraid that this thing is going to change your job or take your job away. It will change your job, but if you don't take it will take your job away.
John Furrier
>> I love this. Market's fast, there's value creation, value extraction.
Zeus Kerravala
>> I think there are no fast followers in AI. You lead or you fall way behind.
Kira Makagon
>> Yeah, yeah. That's a great one.
John Furrier
>> We're doing our best to go as fast as we can here at theCUBE. A mixture of experts here. Want to thank Kira and Zeus for coming on theCUBE, and of course, the AI wave is here, and of course, the disruption and the enablement. New brands will emerge, existing brands will transform. Of course, we're doing our best to bring that to you. I'm John Furrier, your host of theCUBE. Thanks for watching.
Kira Makagon, RingCentral & Zeus Kerravala, ZK Research
search
John Furrier
>> Hello, I'm John Furrier with theCUBE here at our NYSE Studios on the East Coast. Of course, as part of the NYSE Wired community, of course, we've got our Palo Alto Studio connecting Wall Street and Silicon Valley. This is our mixture of experts series where we talk to the leaders shaping the industry, AI infrastructure applications. Here is the president, CEO of RingCentral, of their big investor meeting, and Zeus is here. He is guest and hybrid host. We're going to really discuss the earnings and the investor meetings and also what's happening with RingCentral, how that relates to what's happening in the big wave of AI and ultimately the transformation going on. Zeus, good to see you. Kira, thanks for coming on.
Kira Makagon
>> Thanks for having me.
John Furrier
>> You had a hell of a week. You had earnings and now the investor meeting. How'd that go?
Kira Makagon
>> That was great. We just showcased our new product portfolio, emerging product portfolio, which is AI-centric and we call it agentic voice AI-centric to a number of investors. We had our customers on panels, we had our partners on panels, and they listened. They were there for a couple of hours and a lot of-
John Furrier
>> Business is good?
Kira Makagon
>> Business is great. We just announced our quarter numbers. Business is great. We beat our numbers for the quarter, both on top line and margin, and our new products are growing very rapidly, now approaching and on target to exceed a hundred million in revenue for all the AI-based products and not that many companies in the world today, for all the AI hype that can say it's $100 million business.
John Furrier
>> Yeah, that's not hype. That's reality.
Kira Makagon
>> That's reality.
John Furrier
>> Zeus, you're a CUBE Collective member, and I appreciate you putting this interview together because this is where you're starting to see the signal from the noise, where you start to see the business performance. We go to a lot of investor meetings and analyst meetings together. So what's your take? What's your analysis?
Zeus Kerravala
>> I think the segment that RingCentral plays in is still maybe the single most misunderstood aspect of AI. I think a lot of investors rode the cloud communications wave up during the pandemic and frankly got out of it, took the profits and haven't really looked at it since. And I think when I talk to a lot of the investors, there's a lot of things they don't understand. The feeling is voice is in decline, that AI is going to take all the jobs, and every customer I talk to, it's the opposite. You think of contact centers, they can't hire enough people. They're chomping at the bit to get AI agents to close that gap. Kira and I were talking about this, AI is driving really a voice renaissance where everything we interact with now we do through voice. And so the big global network that RingCentral has for voice actually becomes a competitive advantage. And I just think that from an investor perspective, this whole sector is still very misunderstood.
John Furrier
>> Misunderstanding is when this transitions and well, yeah, transitions. You win in transitions. Here as a leader, this is an opportunity and the voice has been called the killer app because we all know the voice prompts, but voice as in general is never going to go away. But at the same time, if you look at all the wireless growth and all the internet traffic, the data set growth is massive too. So in the old days, optimize for voice, optimize for data. If there's a renaissance in voice and a massive tsunami of more data coming, how do you balance the data-centric architecture? I mean, a lot of people are trying to figure this out. Do I rotate to data-centric architecture or voice or is it all data to you? How do you guys look at that? Kira, we'll start with you and Zeus, I'd to get your thoughts.
Kira Makagon
>> Well, voice is the richest, most ubiquitous form of data. It conveys emotions, it conveys content. It's our most natural form of expressing ourselves is voice. And voice is now actually, is having that renaissance moment because now you can turn the dark matter behind voice into light matter. You can lit it up, and that's what we're doing. We're lighting it up with our technology that we're bringing to our customers and we like to describe it in the following fashion, we like to describe that we take voice and throughout the conversation journey in pre-conversation, during the conversation, and post the conversation. For that, we have products, our AIR, AVA, and ACE products, the family products that we announced, they address those stages of the conversation. So that's a continuous loop of data that is lit up by us, by our technology now we put in the fingertips of our customers so they can drive business outcomes.
Zeus Kerravala
>> Yeah, I think what Kira's talking about too is maybe one of the most exciting aspects of this market right now is a lot of contact center managers and even just talk about voice being dark data.
John Furrier
>> What does that mean? What does that mean, dark data?
Zeus Kerravala
>> You're doing a ton of calls, but none of it you could turn to data, but now with AI, you can in real time convert voice to real time data and be able to use that as part of your data set to analyze customer sentiment or employee segment sentiment. So if you've got a bunch of customers calling and complaining about a product, you would never have known that before because every call is in isolation. Now all that voice becomes data. And in fact, even from a translation perspective, you can translate in real time. It's just that we've never had access to real time voice before. Now we do.
John Furrier
>> So Kira, that's what you meant by lighting it up. You're lighting up the dark data, dark matter and making it valuable.
Kira Makagon
>> Exactly, yeah.
John Furrier
>> Okay, so that means I answered my question then. Everything's data-centric, because you're turning voice, well, spoken word into data, but there's also the user experience with agents coming on. I mean, I go, "Hey Siri, what's the weather today in New York?" I get an answer. So there's a whole other side of the voice. The voice is an interface
Kira Makagon
>> Voice, this is the interface, voice is the new UI. That's what people are saying out there. And indeed it is, because you've got people talking to people, you've got people talking to agents, you've got agents talking to agents. Ultimately, how we human beings interface, it invoices the most natural form for us. And so we try to enhance, light it up and make it delightful. Make it delightful for customers talking to businesses, businesses serving customers, and managers observing what's going on in the business.
Zeus Kerravala
>> And Carol, one of the things that you and Vlad both talked about was with RingCX, that brings almost like a contact center-light capability to a bunch of companies that couldn't access it before. So you think of the big iron contact center vendors, school systems, small retailers are never going to use it. Now with RingCX, you can actually deliver customer experience information to companies that couldn't afford it before, didn't have access to it. And so when you think about that from a business perspective, what's that do to your TAM? It's got to just-
Kira Makagon
>> The TAM is huge. The TAM, the addressable TAM-
Zeus Kerravala
>> It's all in TAM.
Kira Makagon
>> Yeah. It's being uncovered and the estimates go from, they grow 60 billion, 100 billion. It's essentially not well-estimated except that it's in very high numbers and these numbers keep on increasing. Why do they keep on increasing? Because what we're finding out is how to make jobs that today are cumbersome, easier to do, and so you need less training. Now, somebody is going to benefit from that less training, and that comes in forms of technology that's being provided, and that is our products that basically assist human beings or replace human beings where that's needed. For a small business, for example, that's looking to hire another receptionist and may not have money to do that, our AIR product, AI receptionist is a perfect product for that, especially because a doctor can set it up. And we had customers today on the panel that described how essentially the receptionist set up a receptionist to replace themselves of ours. And the net of it was that they were able to take now 30% more calls, those 30% more calls translated for them, small business, in $1.7 million worth of business per year and she's expecting that to grow. That's just one simple example of how we make things that were not even affordable, didn't exist before now affordable for businesses enhancing how they perform, and of course we increase our share of wallet. So the market for this is immense. And going into more sophisticated use cases for that, you can imagine that on steroids in larger companies who are now, instead of only selling them a communication system or a contact center system, which is what we are good at and known for, and we're the biggest out there in voice, nobody matches us, to date in the world for quality, reliability.
John Furrier
>> I mean, when you're hiding in plain sight, it's important. I remember covering the unified communications industry when I started SiliconANGLE 17 years ago, and that evolved from the PBXs of the world and then it became kind of communications. Now cloud brings it to another level, and now AI brings it to another level, which means that the category, the TAM changes. It's not the same Magic Quadrant that it was years ago.
Zeus Kerravala
>> .
Kira Makagon
>> Yeah, yeah.
John Furrier
>> And in fact, most successful companies that I interview in the AI era are often misunderstood and they're the ones making the most progress.
Zeus Kerravala
>> Yeah, actually bring up a good point. We were talking about that on investor day where when Ring Central first came to market, that cloud you see that you talked about was really the value prop was wrapped around PBX replacement. You got an old outdated system, move it to the cloud, but for the most part it was a like-for-like replacement. Now with a lot of the capabilities you're bringing in, the value proposition isn't like-for-like, it is business transformation and some of the customers that you had there talking about how just they're able to do things they could never do before.
Kira Makagon
>> Exactly. Yeah. I mean, essentially we call it do more with less, but really creating business value. At the end of the day, our job is to deliver value to our customers and to drive customer value and increase our share of wallet and to do that continuously, we have to do more for our customers. And how do we do more? We do that with our base products, RingEX and RingCX, and really putting AI as the layer, as the layer or interface layer on top of that such that every interaction, every interaction is now either assisted or analyzed or both of these and preempted when it doesn't have to take place by a human being. And we had customers today on our panel and our channel partners as well who were saying that essentially it's transforming their business. So we're more now in the business of transformation of how customers operate.
John Furrier
>> It's interesting, because when you're talking, I'm thinking to myself, wow, you've actually converged knowledge systems with call center dark data and you're the company brain because it's a critical frontline touch point. If you combine that with say, what we're seeing with search, whether it's helping find information. I did an interview with a small town in the US, small IT department and the age, the humans can take a phone call and know everything what was in the council meeting the day before, and actually quote regulations, questions like they have a superpower because they can bring data to the table. That enables the agent market, which is now in this case behind the scenes, but you're just getting the raw data ingestion, giving that value. Where's that value extraction for you guys? Because now you're essentially brought a whole nother data set into the knowledge systems.
Kira Makagon
>> So in fact is the agents take phone calls on our system at the same time the system shows them potential scripts as to how to best answer the questions. It provides, it gives them guidance right away. It allows their managers to suggest to them better answers, analyze all of that in real time, summarize it, transcribe it, put it into whatever system of record that they need to put it at, and then really create out of that the insights that we talk about so that they can understand how to run their business better.
John Furrier
>> Okay. So I want to ask both of you guys this question because I brought up the Magic Quadrant, it just popped in my head, but I think there's really no Magic Quadrant that fits kind of what we're talking. It's a little bit horizontal. So the question is, you guys were the pioneers in on-prem to SaaS, now there's the SaaS to agent infrastructure. What's your vision and what's your analysis on this? Because now you open up the aperture of value creation and extraction. So one, is there a category of AI? And how do you look at the business model implications?
Kira Makagon
>> There's reports coming out almost every once and they're sort of getting upgraded, updated, so to speak, with new data points because it's changing so quickly. And there's categories of AI conversation intelligence. Every vendor out there that carries any kind of a communication product has AI modules. Really, it's going to boil down to how customers consume this and it's evolving, it's rapidly evolving.
John Furrier
>> Yes, we should put a CUBE quadrant together because you could be at the center of that.
Zeus Kerravala
>> Look, John CUBE's got to be nice because they're in a lot of the Gartner MQs. The fact is, those decision tools that are in the space frankly are very outdated. They're rear-facing. A lot of the criteria they use doesn't really give a company like RingCentral benefit for.... Because you said it best. It's the center of gravity for this stuff, which means you not have to provide the core communications capabilities. But there's a whole bunch of adjacencies around that, how you manage the workforce, quality management, how you score CSAT. Ring announced a couple of new products here today. They've built a lot of those out, but none of that gets counted in the Magic Quadrant. And I think this is a case where in fact, even the-
John Furrier
>> What would you call it? What would you call, what category would you call it? I mean, make one up. Because the AI transition from cloud to AI means it's hitting more value points. And so that's not cloud, but it's cloud scale. Now it's data scale.
Zeus Kerravala
>> Yeah, it's really-
John Furrier
>> Putting him on the spot here.
Zeus Kerravala
>> Really intelligent converged communications, because it's employee and customer facing, and it's got AI that analyzed that to help you understand everything from back office to front office. And so Gartner's historically treated those two things the same or those two things separately. You have employee communications, customer communications, but especially when you get into the midsize customers, those are all the same people. And so to try and separate them and create this-
John Furrier
>> It's interesting because just riffing a little bit on this one point, because I think it's clear that if you look at the AI and the NVIDIAs of the world, they nailed training in the big AI factories and inference is the killer. We look at the edge devices, they have inference at the edge, but no training. So what I think of what RingCentral does, you're getting real time new data coming in. I mean, it's new. It's not like synthetic data. It's real new data that hasn't yet been trained, but it comes in, you're turning it into value. So that's instant net new signaling from customers.
Kira Makagon
>> Yes, exactly. And that's the beauty of RingCentral being RingCentral is because the first point of contact for a customer to a business is RingCentral. And you need that fiber. And now we're, like I said, we're lighting up that fiber by understanding what's being transpired, that point of communication so that you can immediately, just like you said, the models are being trained. Well, the models here are listening to the conversation in a secure privacy-aware way, but for that particular customer, it can add value to the conversation. And it could be very simple. I could be simply on the phone and I'm having the conversation, AI is taking notes for me, AI is analyzing what I need to do next. AI is depositing it someplace else, and then AI is setting tasks for me and send me a reminder that after this conversation, I got to go back and call this customer a week later.
Zeus Kerravala
>> Yeah, yeah. I think nothing underscores that point though more than, and John mentioned frontline, the category of tools you built historically, it's with targeted knowledge workers. More and more I'm seeing RingCentral and your peers go after the frontline worker who have never had access to tools before, and those are the employees that sit between back office and front office.
Kira Makagon
>> Exactly.
Zeus Kerravala
>> And again, when you talk about TAM expansion, I think I saw a data point, only 20% of the workers are knowledge workers. The rest of the 80% we've not given any good tools and it's an undertapped, underappreciated market.
John Furrier
>> Yeah, the tooling and platform conversation, I love that because your platform with tools, agents are coming in. Kira, share the momentum. I know you have the earnings call, these public stuff out there, but just generally for the folks understanding the value of RingCentral, I certainly now get it 100%.
Kira Makagon
>> Yeah. Over the last two years since we started tracking what we call new products, all of the AI-based products, we've gone from essentially zero in revenue in those products to on track surpassing 100 million this year. So that's zero to 100 in two years. There's not many startups, the unicorns can't do it.
John Furrier
>> That's escape philosophy trajectory.
Kira Makagon
>> It's escape philosophy. If you look at the adoption of curves from these different products that we have in the market today, if you look at the adoption curves by customers in terms of number of customers, they all look like this. They look exponential. And we're just starting. We really are just starting because customers are still learning. Customers are still asking questions like, "What do I do? What exactly does this mean? We hear this AI thing, but what can it do for me?"
John Furrier
>> And how do you translate into priorities from your focus and you're executing the growth plan? What's the focus? What's your optimization plan?
Kira Makagon
>> Excellent question. What are fundamentally, we're a product company, so we are thinking what are we spending and how are we allocating our capital? And our golden asset is our technology people, our product people. We spend about a quarter of a billion dollars on our products and technology organization. More than half of those dollars are now going into these new products, our agentic voice AI studio products, portfolio of products covering our RingEX, RingCX portfolio of companies, all of our multi-product platform. That's immense number of dollars and that dollar amount is going to increase. Now, behind that, we have an army of salespeople, highly trained salespeople that are all being trained to sell these products. And so that army is now unleashed out there on our customers and future customers. That's dollars being spent by us, Ring Central, a $2.5 billion company to grow our TAM with these new products.
John Furrier
>> And you're accelerating and enabling a data mode for your customers to have a competitive advantage. New products are going to emerge for them.
Kira Makagon
>> Exactly. Well, exactly. Those who are adopting our products quickly and learning how to use them, learning how to take advantage of that. I'm just giving you a stat for a small business and I can give you a lot more stats. Business side reporting, 30% increase. Small business improving, 30% increase in their intake of opportunities, leads. More mature businesses are coding efficiency in their customer support departments and having to do again, more with less, not having to hire, not having to train, not having to deal with churn. That all translates to better customer experiences and more revenue for our customers.
John Furrier
>> Zeus, the tray's behind us. Yes.
Kira Makagon
>> Yeah, yeah.
John Furrier
>> RingCentral, calls. calls. You guys are a listed company at the NYSE. You rang the bell three times. Tonight will be your fourth.
Kira Makagon
>> Excited.
John Furrier
>> What's it like to be an NYSE listed company?
Kira Makagon
>> It's been great. Look, it is been wonderful. It's been wonderful to be up there. It was absolutely exhilarating the first time, and I expect it'll be just exhilarating today the first time around.
John Furrier
>> Zeus, summarize RingCentral folks evaluating. It's obviously the numbers don't lie. They got financial success. Their product-led growth is kicking in just the beginning, she said, so what's your take on all this?
Zeus Kerravala
>> To me, it's a company and transformation within an industry and transformation. I think the entire industry benefited from COVID, but in a lot of ways I think it hurt you in the long run because it took priorities away from things you would've done differently had that bubble not come. And so we're just catching up now. But I think from an investor standpoint, I'll go back to what I said. I think the value that communications plays in digital transformation is largely misunderstood by the investor community. In fact, when you talk to anybody in AI, talk to NVIDIA, they'll say the low-hanging fruit is in customer service and being able to transform that. And so who does that better than RingCentral? And so I just think there's, if you're to ask me what inning we're in John, the transformation here, I think the pitcher's still warming up.
John Furrier
>> Kira, give you the last word here on theCUBE here, as the trades are flying here on the option floor.
Zeus Kerravala
>> That's Kira's account.
John Furrier
>> As someone who's taking the company public again, you had your anniversary here, now you're celebrating your fourth ringing here. You're in the AI wave. You guys have made successful transitions. What's your advice to other leaders who want to harvest the AI wave, harvest, the value that's created? How do they think? Is there a mindset? Can you share your thoughts on how other leaders should think about their business?
Kira Makagon
>> Yeah, so it's the megatrends of all megatrends. It's moving faster than the internet and it's real. It's actually creating real value. This is not something hypothetical, so you have to embrace it. You have to take it a step at a time, but you got to move. This is moving fast, and if not moving, you're going to be left behind. And so you got to think differently and learn, learn fast and adapt and not be afraid that this thing is going to change your job or take your job away. It will change your job, but if you don't take it will take your job away.
John Furrier
>> I love this. Market's fast, there's value creation, value extraction.
Zeus Kerravala
>> I think there are no fast followers in AI. You lead or you fall way behind.
Kira Makagon
>> Yeah, yeah. That's a great one.
John Furrier
>> We're doing our best to go as fast as we can here at theCUBE. A mixture of experts here. Want to thank Kira and Zeus for coming on theCUBE, and of course, the AI wave is here, and of course, the disruption and the enablement. New brands will emerge, existing brands will transform. Of course, we're doing our best to bring that to you. I'm John Furrier, your host of theCUBE. Thanks for watching.
John Furrier