Mitel Clearing Up 'Uncertainty' Post ShoreTel Buy

Mitel says it’s poised for continued growth with an aggressive strategy and increased investment in all areas of the company.

And yet Mitel has been plagued by rumors and speculation that it plans to abandon its UC business, even though it’s a $1 billion business with 70 million UC licenses globally.

A big part of this week’s Mitel Next conference focused on messaging to partners in hopes of quashing the rumors and sending partners back home feeling bullish about the company’s future.

“We are a partner-led company and will continue to be, so our partners, our consultants, are a key aspect of our strategy,” said Rich McBee, Mitel’s CEO. “We’re going to improve and we’re constantly improving. We want you to feel good about the investment you’re making in us because we feel good about investing in you.”

Mitel’s Mike Conlon

In a Q&A with Channel Partners, Mike Conlon, Mitel’s vice president of global channels, talks about how the rumors started, making the most of customer opportunities and the changing competitive landscape.

Channel Partners: Many attendees came here concerned that Mitel is getting out of the UC business. Where does this come from and what do you want partners to know?

Mike Conlon: There’s just been a lot of speculation and it really stemmed out of the (ShoreTel) acquisition. When we went through the due-diligence process and the acquisition closed, there was a period of uncertainty from the ShoreTel channel. They weren’t quite sure where we were going to go as a company. They weren’t familiar with Mitel. Our channel-partner community between Mitel and ShoreTel [includes] very little overlap, less than 10 percent … so there was just a period of uncertainty; they weren’t quite sure. They had not seen a lot of innovation coming out of ShoreTel when it came to the onsite platform, which was the Connect platform, so I think they just got nervous. They just needed some level of reassurance over time.

Now we continue to message that the UC business is extremely important to us overall [but] they haven’t necessarily believed it completely. And some of the opposition was based on the fact that they still didn’t really know us, they didn’t really understand the strategy, and some of it was … really a selling technique of the heritage Mitel channel, using the fact that we were going to divest away from the Connect platform. They used it as a sales technique against it.

So all these factors started playing into it, and since we only get one chance each year at this partner conference to communicate back to the full channel, we wanted to make a full stand and say this is the portfolio on the UC side, this is the messaging on the UCaaS and we are not divesting, we are moving forward.

CP: Any indication yet that they’re getting the message?

MC: The last two days I think our messaging has been spot on. We’ve really made a stand to be very communicative that we are definitely all in in this billion-dollar space that we play in today and it’s our UC portfolio. So extremely positive feedback overall from both …

… the heritage Connect partners and the heritage Mitel partners as well.

CP: What’s the overall message to partners here at the conference?

MC: The bigger messaging to the partners overall is the transformation that we’re going through as a company and the transformation that’s occurring in the channel as well. There’s a lot of consolidation, we just saw it this week with ConvergeOne buying Advantel Networks, and we’re going to continue to see consolidation in the marketplace. The overwhelming message we wanted our partners to leave Mitel Next with is our overall commitment to the channel. We continue to invest in a global channel program, in tools and resources like our MiAccess partner portal, in the messaging and the communication, in our coverage model, in our resources in the field as well, and how our overall go-to-market strategy really lays out. The underlying message was, “We are here to stay. We’re not moving away from any of our portfolio.”

MC: Rich McBee talked about big opportunities for Mitel and its partners amid fierce competition, and that partners need to connect with their entire customer bases ASAP. Can you elaborate on that?

MC: There is a sense of urgency. And what we’re finding is as we continue to grow in the UCaaS space, our born-in-the-cloud competition really is very aggressive when it comes down to customer acquisition. 8×8 is spending 67 cents on every dollar to acquire a customer (and) RingCentral is spending 50 cents on every dollar on customer acquisition. It’s all about speed in this market, and by the time a lot of our customers get to a point where they’re going to decide they’re going to upgrade to potentially move to UCaaS or upgrade their existing UC platform, they’ve already done their due diligence and research. And when that happens typically, the VAR who may not necessarily have been in touch with that customer on a regular basis is … in the backseat trying to drive the car. And that due-diligence process and the research that goes into looking and potentially going into a UCaaS model is then dominated potentially by another VAR or the agent community that’s becoming very aggressive in this marketplace, migrating customers from typical UC to UCaaS.

CP: With all of the consolidation taking place, is that changing your competitive landscape?

MC: There are a lot of companies in this UCaaS space right now. There [are] some large ones – there’s probably a top three – and then there [are] new ones popping up all the time. So we have to do our best in driving home our message, and in owning our install incumbent base along with our partner community. We are continuing to invest in our agent channel itself. So it’s all of these different dynamics and then, of course, building out the true feature functionality of a UCaaS solution. How do we make as close to parity to a UC solution as it would be if you were …

… buying a UCaaS solution. So you factor in all of these components and that really drives our message home pretty strong to the partner community that Mitel is really your best path to the customer in being able to provide any type of solution the customer is looking for.

CP: Is the customer conversation changing with many customers already knowing what they want?

MC: It depends on how large of a customer we’re talking about. What we see in under 100 employee, 100-seat companies is that those are the ones who are out doing some due diligence and research, and they move pretty quickly. As you start moving up the chain to midmarket and enterprise, that’s where the sale becomes much more complex. So that’s where the partnership between our VAR community and our agent community, and our territory account managers, our cloud specialists and contact-center specialists, that’s where the partnership really thrives in being able to go into some of these larger accounts, midmarket and enterprise, and really sell a value-added solution.