This week, Mitel confirmed it was entering Chapter 11 bankruptcy.
While the company stressed that it expected it to be a “swift” process that would better position it for future growth and success and that it would be business as usual for Mitel customers, partners, employees and vendors, there have been natural voices of concern about the process’s implications.
Is there any more detail on service continuity? Will Mitel collaborate with customers looking to future-proof their infrastructure? What do the next three months look like?
James Banks, Group Technical Director at Mitel UK partner Charterhouse Voice and Data, spoke to UC Today to answer some of these questions.
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Can Charterhouse or Mitel provide any more details or assurances about service continuity and support during this process?
There will be some constraints on what any Chapter 11 announcement will say in public for all the right reasons, but I think the point that I probably want to get across, putting my Mitel partner hat firmly on, is that the process is not a surprise.
Clearly, there was a pre-announcement earlier than expected to the world, but I think any responsible provider will be having all of those conversations with key vendors.
There are probably two ways to look at that question, the first of which is how Mitel got there. The key point that I would make is that the Mitel filing is voluntary. Did they need to do it this week? No, I don’t think so. Did they need to do it next month or the month after? No, probably not. But I think it was probably inevitable for a business of their structure carrying a lot of debt post-Cert in 2018 to need to make some changes.”
I think anybody with a commercial understanding will see that the level of debt that Mitel was carrying in the current economic climate is going to create some challenges to cash flow just in terms of servicing the interest requirements for those debts, and it’s a fast-moving market. I think any vendor needs to be able to invest in the right things. So my expectation, without any knowledge, would be that at the end of this process, Mitel will be significantly de-leveraged and able to do more things.
What About Continuity and Serviceability?
You’ve got to look at the Mitel portfolio. It fills a unique niche in the market: critical comms. It’s the type of environment, whether that’s healthcare in the UK or other things where you need on-premise survivability, that magic five-nines number or similar. It just needs to work.
However, as a Mitel partner, an MSP, or an integrator delivering these things at scale today, we are still seeing many requirements that need on-premise survivability, whether it’s fully on-prem, hybrid, or private cloud.”
I think you can see quite clearly that we’re throwing our hat in the ring alongside Mitel as a partner; we’re here supporting Mitel and, just as importantly or more importantly, our customers with an investment in Mitel.
From a supportability perspective, you need a healthy vendor, and a vendor with the cash flow to invest in R&D is in a better place than maybe one that doesn’t.
I can’t speak for other resellers, but we continue to invest in Mitel. Even pre-announcement, we had a clear strategy that saw us adding Mitel heads, adding accreditation to support our Mitel customers, and then also having availability and inventory for critical spares.
Bearing in mind that many Mitel deployments are inherently on-premise or private cloud or have appliances or similar, it’s a very different skillset from a public UCaaS offering (of which there are many with Teams, Zoom, and various others), and you need to have trained people and critical spares available.
Mitel has said very publicly they’re expecting this to be a quick process. As a partner, I see no reason to think that won’t be the case. We’re not talking years here; we’re talking weeks and months, but at the end of it, you’ve got a Mitel, which is not in Chapter 11 and still has a relevant niche in the market.”
For much of the public sector, anywhere that requires critical comms, and definitely that mid-market enterprise space plus a number of well-defined vertical markets, Mitel is still a live conversation.
The other part of that is before this week’s announcement, as a Mitel partner, we were and are quite excited about the other announcements. You’ve obviously got a global partnership with Zoom which is extremely noteworthy – we’ve seen the potential for that a long time in advance, and even before the announced partnership, we were the only partner in the UK that’s a platinum partner for both Zoom and Mitel, an equivalent level for Unify, and we’ve been working on ways to bring the two together in tandem.
I think that aligns with what the market’s looking for, which is something that gives you the best of both public cloud UCaaS where you need it and on-premise survivability. So, a simple answer to a simple question is no, not concerned.
I think Chapter 11 has a stigma in Europe that probably isn’t in place in the US. This is not Chapter 7 liquidation; this is 11, where a business of a certain size can have a bit of space to do some restructuring that it needs to do, and I’m sure that the full details for that will be in the public domain sooner rather than later.
What responses or concerns have you been hearing from Mitel customers, and how are Mitel and Charterhouse working to address them?
The obvious initial response from any Mitel customer, whether it’s somebody with 100 seats or 10,000 seats or anywhere in between, is probably one of surprise.
Every partner will have different ways of engaging, but the most important thing is to be able to provide good-quality information. None of us has a crystal ball, and none of us knows what the end of the process looks like, but I think I’ve got a reasonably good idea.”
One of our first orders of business as a responsible Mitel partner was to engage with our customers of all sizes. We’ve got our formal ways to communicate, we’ve got our ad hoc (using our account management function), and we’ve just finished running a customer round table alongside senior representation from Mitel. We’re doing another one next week and possibly another after that.
I’m going to talk quite bluntly here. I think it’s really important that the partner community adds value. As a value-added reseller, you’ve got to make sure that you’re adding value. From some of the engagements that we’ve had, I’m not sure that all partners necessarily have the same proactive approach, and that’s concerning because it’s a competitive marketplace.”
All of the vendors in that space, and there are many going after these customers, but I think there’s definitely an attempt from various fronts to introduce a lot of FUD, fear, uncertainty and doubt: ‘It’s another Avaya, Chapter 11, is it supportable?’ That is not a message that we would ever deliver, and I don’t think it’s the right way to do things.
As a partner, hopefully, we’ve been seen very visibly standing shoulder to shoulder with our key vendor here in Mitel to make sure that we get the messaging right to these customers with investments in Mitel, ‘These are not small investments; these are meaningful long-term technology investments in Mitel as a technology stack.'”
To be candid, I think there’s nothing wrong with presenting options. For any customer, there’s nothing wrong with having other conversations. Is Mitel the right route forward? But that shouldn’t be affected by this Chapter 11 announcement. I’d hate to see it used as a lever or a catalyst to try and scare somebody into leaving a perfectly good technology stack.
Let’s be honest: for many organizations, it’s not about the badge or the handset’s model. The end user just wants to pick it up and get a stable, reliable voice at the other end now.
One of our obvious use cases is, and we do a huge amount of work in the healthcare sector, if you’re on-site in any NHS property in the UK, you expect to be able to go to a handset, pick it up, dial double two double two, and get an emergency response, whether that’s because you need a crash trolley or any other scenario. That’s a really clear example of where communications just need to work.
We can’t just have ‘Sorry, couldn’t connect to the cloud or no service availability,’ you’re expecting that to work in seconds or minutes rather than hours or longer tickets with the help desk. I think that that’s a really good example of the type of space where Mitel plays alongside other vendors. We’re determined to do the right thing for our customers and give them the information and the tools to make an informed decision on the risk or otherwise with Mitel as a vendor.
Do you anticipate changes to Mitel’s product roadmap or any impact on software updates/critical security patches as a result of the restructuring?
The message is business as usual. There are no changes to our process for ordering software renewals or raising support tickets, and there are no changes to heads, people, or processes for logging those tickets. It’s all still available, and I can confirm that at the coalface because we’re a Mitel partner with many systems out there in the field under support.
We are seeing no difference in Mitel’s day-to-day operations. That’s not me saying that there won’t be any change in the future because I can’t predict the future, but we are seeing no difference there.”
Mitel has obviously a number of lines of business, whether it’s traditional Mitel or heritage Mitel (Unify). We’ve still got a lot of support in place for both of Mitel’s major software lines and I’m not expecting any change in the short to medium term there.
I’m sure, as a vendor, there’ll always be some consolidation, but I don’t think it will be as a result of this Chapter 11 process. It will just be a result of a world that is very different to what it was three or four, five years ago. We get that with all vendors, but I think Mitel has been very public in that it is focusing on its market of hybrid environment and private cloud and dedicated on-premise environments, which represents significantly more than half the addressable market in the UK today based on systems actually deployed.
Who knows what the future holds, but there’s a lot of product still there, and as a part of that, we have no challenges whatsoever with supporting that wide and varied portfolio.
Have many customers contacted you about leaving Mitel? Are there opportunities for customers to future-proof their communications infrastructure during this uncertain period?
We have had no customers come to us this week and say, ‘I’m concerned about Chapter 11; I want to leave; I need to get rid of Mitel.'”
That’s not me saying that they won’t necessarily reach that decision over time based on whatever rationale, but I think it’s a useful stick in the water that we’ve had no customers with that message of a knee-jerk reaction of ‘Oh no, Chapter 11, I need to go and do something else.’
Some of our customers have engaged with us proactively, asking, ‘You’re our Mitel partner; where do we go from here?’ A lot of that is incumbent on us as a responsible service provider to engage with our customers as we have. As part of that, if they want to future-proof themselves—and this is my 101 take on it—then our role should be to make technology simple for our customers.
So, as providers, we would understand our customers’ footprints today and where their organizations are looking to go in terms of the technology stack and that environment. Telephony requirements today are very different from those five years ago.
If customers want public cloud, for example, you’ve got a really good global partnership there between Mitel and Zoom. I’ll throw my hat in the ring. We’re the biggest partner for both together in the UK, and there are many customers already where we have hybrid deployments using Mitel and Zoom.”
Equally, there’s a really good story there with Microsoft Teams as the 800-pound gorilla in the corner of the room. Who doesn’t have Teams on their desktop? If I look at the heritage of the Mitel product, we did our first integration of Mitel and Microsoft UC back in 2005 with the then Live Communications Server product – and that continues today in the guise of Teams – and we have many Mitel and Teams deployments under support.
That’s not to say that somebody might decide, ‘Actually, my use case is different from Mitel’s core strength. I just want public cloud UCaaS.’ As a reseller or an MSP, we can quite happily have that conversation, as we would do anyway without the Mitel announcement, but I think our role should be to work with our customers, understand where they are trying to get to, and then outline what those options are, which may or may not include Mitel.
If I look at the UK as a marketplace, it is very, very reseller-centric. Whether that’s resellers, MSPs, or integrators, it’s entities like Charterhouse that own the day-to-day relationship with the customer and are adding the value, and that’s where we’ve got to make sure that we get the comms right.
I commit to sharing more information with end users as it becomes available. I have no doubt that Mitel, as a responsible vendor, will also keep us very well informed on the progress of their process.
Looking ahead to the next few months, is there anything customers should look to or action to stay informed?
The public time frame provided by Mitel and their FAQ is that they expect the process to take 30 to 90 days. That sets a really nice wrapper for the time frame we’re looking at because, within the next quarter, we’ll see in concrete terms the output from Mitel’s financial restructuring process.
My message as a Mitel partner today is very clear: don’t panic and stay in the boat. There is no urgent need to do anything. I think I would make sure that you’ve got a committed partner in the boat with you, whatever partner that may and someone that is well-tooled to support Mitel.”
Maybe it’s an opportunity to reevaluate what you’ve got in place and maybe look at the roadmap. At the end of that process, if you’ve got Mitel deployed today for 500, 1,000, 10,000 users, there’s every chance, based on assessing the wider market, that it’s still relevant and will offer some value.
Again, if we look at where the market’s gone, most vendors provide their products as cloud, but a lot of that Mitel investment may well be perpetual. If we look at it today, if somebody’s got a Mitel platform today that might be 10, 15, 20 years old, providing its software is updated, and if you’ve got a good partner on board, that platform has the same capabilities as if you went to market and bought a Mitel today.
That Mitel platform competes very well. If you’ve got an offering in place that offers you stability, your users know it, you’re well supported, and you’ve de-risked that side of things, then I think you would need a compelling argument to shift that to something else.
A logical question is, where are we trying to get to? How do we use our communication devices, whether that’s plastic ringy ringy things on desks, softphones, Teams, or Zoom, and then evaluate where that goes?
It’s a watching brief. Engage with your partner and do that roadmap exercise. At the end of that, you should have a range of options and say, ‘Here’s what we can do, and here’s what it does for our business.’ Hopefully, some of that aligns with where that organization is looking to go.’
However, I am expecting a swift and positive conclusion to the process, which, again, from the dialogue that we’ve had both post-announcement and crucially before, we are very reassured and remain 100 percent committed to Mitel.
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