Deal to Buy Unify from Atos Seals New Direction for Mitel, CEO Explains
The deal also includes a role for RingCentral.
January 26, 2023
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Regarding the culture of the two companies, Loomba said:
“We really do share this mutual culture of innovation toward delivering very practical customer-focused UC solutions. I think that’s really exciting. And so, while there are some differences, I think there’s a real great commonality between the companies in their approach. What we were really excited about was three basic areas. One is around extending our capabilities in the market and going after new markets. It scales [Mitel’s] overall business almost doubling revenue. It enables us to go and work with our installed base and keep them very happy and ensure that they stay in line to oriented solutions. This gives us a bigger base to go after that. And, of course, it drives the economies of scale, bringing these two large companies together, driving the profitability.”
How does RingCentral fit into the picture? Loomba explains:
“For UCaaS, we’ve decided to partner and work with RingCentral. We work directly on migration with MVP, RingCentral’s core service. [Unify] basically white labeled a RingCentral system and calls it Unify Office. It’s two different approaches we’re going to work through in our integration process. What’s great is we have the same valued partner in RingCentral for that.”
What are the companies’ approaches to the channel?
“You know, [Mitel] is very channel centric, almost exclusively. [Unify] has a channel as well as a direct enterprise sales motion, as they have a managed services business. You know, one of the things you need to manage—and I think they’ve done a really good job— is when you have both motions. You got to make sure they’re not in conflict. You don’t want to compete with your channel. [Unify] has done a very nice job of marking where their channel takes over,” Loomba said.
Martin Bitzinger is senior vice president, product management and marketing at Mitel. He also spoke at the press conference.
“The services business that’s coming over [from Unify] is very big in magnitude compared to the overall. What is coming over is more than 1,400 dedicated services experts in the communication and collaboration space. They do the full scope of a customer lifecycle, implement, operate, maintain support, and they have some very, very large enterprise class customers that they serve. They have capability and delivery centers all around the world, from Brazil, Poland, Romania, Bulgaria, Greece, and India to deliver true 24/7 kinds of capabilities around those customers. This capability will position us very, very differently when we’re trying to go after enterprise class customers,” Bitzinger said.
Bitzinger suggested that the UC landscape has radically changed.
“We’re not talking about a box anymore that you put somewhere. The solutions we’re talking about are modern software-based solutions. And we think there’s a lot of room to grow to make them even more deployable, whether it’s private cloud, or public cloud environments, such as your Amazon, or combinations. They’re often in the hybrid manner in conjunction with cloud management solutions. There’s a lot of work to be done there to really help enterprise customers migrate and move forward. Along those lines, we’ve also introduced API integrations that go in workflow business integration. There’s a lot of work to be done.”
Loomba talked about critical product lines and how they impact verticals.
“It’s no secret there’s overlap as well with the portfolio, specifically on the devices front. But we’ve been there before, multiple times before, and I think we’ve shown a proven track record of being able to, you know, rationalize the devices portfolio down to get to a very, very strong portfolio both on the desktop endpoints, peripherals, accessories and also especially the cordless endpoints. They are still a critical component in verticals… important verticals such as health care. And we’ll be in a very, very strong position with that combined portfolio to compete and gain market share,” he said.
Loomba talked about critical product lines and how they impact verticals.
“It’s no secret there’s overlap as well with the portfolio, specifically on the devices front. But we’ve been there before, multiple times before, and I think we’ve shown a proven track record of being able to, you know, rationalize the devices portfolio down to get to a very, very strong portfolio both on the desktop endpoints, peripherals, accessories and also especially the cordless endpoints. They are still a critical component in verticals… important verticals such as health care. And we’ll be in a very, very strong position with that combined portfolio to compete and gain market share,” he said.
Mitel president and CEO Tarun Loomba can’t share too much about the exclusive, ongoing negotiations the company has with France-based Atos to buy its Unify portfolio.
What he can do is explain what “exclusive” means.
Mitel’s Tarun Loomba
“This proposed transaction is no different from any other M&A transaction that Mitel has done. In this case, because Atos is a French publicly traded company, the process and the terminology are a bit different,” Loomba said at a press conference on Wednesday. “But the end result is exactly the same.”
That result, according to Mitel spokespersons, means that Unify’s portfolio, partners and talent would “significantly expand Mitel’s scale and offerings.”
Earlier this week Mitel announced the pending deal.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup. |
Atos is a multinational information technology service and consulting company that specializes in everything from unified communications to cybersecurity. The company’s Unify portfolio will bring voice platforms, collaboration and contact center products to Mitel. Unify would also deliver its managed services business. This will allow Mitel to help enterprise organizations digitally transform their communications environment.
The transaction should close in the second half of this year.
The Takeaway
Techaisle’s Anurag Agrawal
Anurag Agrawal, founder and chief global analyst at Techaisle, posted on LinkedIn that there were potentially six key outcomes surrounding the upcoming Mitel and Unify deal.
1. Continued focus on on-premises modernization with complementary RingCentral partnerships.
2. Widened customer base: SMB, core midmarket, upper midmarket, enterprise and geographies.
3. Services-led consultative opportunity for the enterprise segment.
4. Potential to replace and refresh installed devices with those from Mitel.
5. Doubling down on offering customer choice and flexibility.
Finally, Mitel is “re-energized,” Agrawal wrote.
Mitel’s CEO discussed some of these points during the press conference. See the slideshow above for Loomba’s remarks.
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