2016 was certainly not a dull year in the world of Mitel. First of all, it looked all set to purchase enterprise heavyweight Polycom. Then, the next everyone heard, the deal was off.
Following that, come December, Mitel announced that it had agreed the $350 million sale of its mobile division to Xura, the Massachusetts based comms solutions provider.
That sparked a lot of comment about the direction Mitel was heading in. Having at one point looked all set to seriously beef up its reach in the enterprise hardware market, it ended 2016 down a mobile division.
Core Brand
CEO Richard D. McBee’s comments following the Xura deal also got people talking. He conceded that he still believed there was room to grow in the mobile market, as there was in enterprise and UC, but he did not feel Mitel was big enough to capitalise on all three.
Was this an admission of weakness? Was it a sign that Mitel had become unsure of itself in the changing telecoms market, that it was seeking to slim down and consolidate rather than compete at the top level?
There is another, more favourable interpretation. Rather than a sign that Mitel realised it was out of its depth in mobile, perhaps it signals a strategic decision to get back to focusing on what Mitel knows best – enterprise telecoms solutions.
Its mobile division was only created in 2015 with the purchase of Mavenir Networks, anyway. It was hardly a core part of the business. What the venture into mobile suggests is that Mitel is a company confident enough to dip its toes in new markets, but smart enough not to dally if something does not fit. There is absolutely nothing wrong with a business strategy which prioritises your core market and brand identity.
UC Today Opinion
As McBee put it, the money generated from the mobile sale “enables us to intensify our focus and capital in expanding our leadership position in the enterprise market as it prepares for large scale digital transformation of premise-based systems to the cloud.”
The move to the cloud is the key here. To remain global leaders in enterprise telecoms, Mitel will have to evolve beyond its traditional position of providing on premises and hardware solutions. Gaining a foothold in the cloud market will require expanding its software and UC offerings.
That is a big enough challenge and opportunity for Mitel, without the distraction of mobile.
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