RingCentral and Zoom have agreed to dissolve their reseller agreement in an orderly fashion to prevent damage to RingCentral customers using its Zoom-based video-conferencing product.
On Monday, the two companies announced that they had settled Zoom's federal court lawsuit. The suit accused RingCentral of violating the companies' partnership by launching a homegrown video conferencing product while selling the Zoom-powered Meetings. However, RingCentral claimed it was Zoom that had broken the contract by delaying technology updates, to the detriment of RingCentral customers.
The companies released few details about the settlement, other than that it will allow RingCentral to transition customers from Meetings to its product, RingCentral Video. RingCentral lawyer John Marlow said the pact would let RingCentral customers migrate to Video at their pace.
"During the transition period, RingCentral Meetings customers will be fully supported, including receiving new core features and updates," he said in a statement. Neither company would say how long the transition period would last.
The settlement is an indication that the two companies realized an out-of-court agreement was the best option, said telecommunications attorney Martha Buyer.
"The original pleadings read more like a corporate hissy fit than other pleadings that I've read before," she said. "[That] may have resulted in a bonanza for attorneys preparing the pleadings, but without much benefit to either party."
The settlement is the best outcome for RingCentral customers, said ZK Research founder Zeus Kerravala.
"Partnerships come and go, [but] it's important for vendors to always do what's best for the customer," he said.
The Zoom-RingCentral partnership started in October 2013. It let RingCentral resell Zoom's service in products with the tagline "powered by Zoom."
RingCentral launched Video in April 2020 and immediately began offering it or Meetings to new customers. Older customers also had the option of either product.
Zoom sued in March 2021, claiming RingCentral had breached its reseller agreement. In its filing, Zoom accused RingCentral of a "bait and switch," saying the company was trading on Zoom's brand name while working to improve its product.
"RingCentral is dangling Zoom in front of potential customers to lure them," the complaint said. "If RingCentral truly believed its video product was a quality replacement for Zoom's product, then it would transition all of its customers with no further delay."
The court granted Zoom's request for an order prohibiting RingCentral from selling Meetings while the case was pending.
RingCentral countersued, claiming Zoom had violated their partnership numerous times. The company accused Zoom of delaying Meetings features after launching a Phone service that competed with RingCentral's offering.
Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily News, Walpole Times, Sharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.