Anyone lucky enough to talk to Mitel CEO Rich McBee for a few minutes will see clearly where he plans on heading with the company. His belief is that the current UC industry needs a third strong vendor to compete against the current fore-runners (Microsoft and Cisco). The strategy behind McBee’s thesis, then, is to roll up industry players into a larger provider, turning a two-person competition into one with three heavy contenders.
Over the years, McBee has been taking phenomenal strides in showing off his competitive nature – particularly through the acquisitions of Astra Technologies and Inter-Tel. However, he also came out short when chasing larger companies like ShoreTel, and Siris Capital grabbed Polycom before Mitel could close an acquisition. So, what’s next?
The UC Submarkets in Questions
Many experts believe that some of the following UC submarkets could be next on the menu for Mitel, including:
- Enterprise Video: Mitel’s interest in video began with the Polycom bid – a surefire sign that McBee sees value in this market. While Polycom is the largest video vendor around, it’s not the only option. Mitel’s appreciation of technology could mean that it starts to look at Vidyo. What’s more, since the chaos surrounding the Vidyo launch in 2005 has died down, the valuation may be more reasonable today. Other videos companies that might emerge into the crosshairs include Lifesize, Pexip, and Zoom.
- Unified Communications as a Service: It makes sense that the UCaaS model would represent a natural complement to the current Mitel business structure, but it also changes the dynamics of the company. Running a service-first business is a lot different to running one oriented around products. If UCaaS hits the mark for Mitel, it could present plenty of options including RingCentral and Vonage. Some UCaaS providers also own their own networks. However, UCaaS may be lower on the priority list than other options.
- UC&C Infrastructure: Finally, this is the area in which Mitel has been the most aggressive. Though McBee probably won’t try to get his hands on ShoreTel again, if the board got restless and put the option in play, he might consider it. Avaya’s customer market share make it an attractive option, but this acquisition could be complicated given their current state, and major 13issues like debt and pensions, and separating the parts of the business that are useful from the rest.
Different Technology Segments
Of course, there’s always the option for Mitel to go after companies in a range of technology segments that run naturally alongside UC. However, conversations with McBee suggest that some options are definitely out.
- Service Provider Infrastructure: Using Mavenir, Mitel got a foot in the door of various service provider companies across the globe. A potential avenue for growth may be to complement Mavenir with another infrastructure, but McBee doesn’t see the need for investment here.
- Network Infrastructure: Many UC solutions offer combined network/voice sales. Some businesses believe that there is value in this, and Mitel had the option to go this route. However, McBee has already suggested that this doesn’t seem like the right route for him.
- Wireless LAN: This option would make sense following the acquisition of Mavenir systems. Many wireless LAN companies are available right now, but McBee currently believes that this market is commoditizing.
UC Today Opinion
Perhaps one of the most important things to note about McBee’s current strategy, is that he refuses to overpay for any company. When he considers an acquisition, McBee sets a number and walks away when the target company goes beyond that point. Passing on Polycom is a good example of what happened here.
