This week Mitel announced an agreement to purchase ShoreTel in an all-cash deal worth approximately $430 million. This is probably one of the unified communications industry’s biggest pieces of news since Avaya filed for chapter 11 in January earlier this year.
Interestingly the deal that Mitel has just done is $110 million less in value than what they offered ShoreTel shareholders about three years or so ago.
Mitel’s recent deals
- 2007 Mitel acquired Inter-Tel
- 2013 acquired prairieFyre software Inc
- In November 2013, Mitel purchased Aastra Technologies for $400 million
- 2014, Mitel acquired contact centre supplier OAISYS for an undisclosed sum 2014, Mitel’s first bid for ShoreTel was rejected by ShoreTel ($574 million)
- 2015, Mitel announced intentions to buy Mavenir Systems for $560 million
- 2015, Mitel acquires global hospitality specialist TigerTMS
- April 2016, Mitel announced intentions to buy Polycom for $1.96 billion – however, the acquisition did not happen.
- 2017, Mitel sells off Mavenir Systems Xura and loses $175 million
- July 2017, Mitel acquires Toshiba Corporation's Unified Communications business
- 2017, Mitel announces they are acquiring ShoreTel for $430 million
Why is Mitel acquiring ShoreTel?
ShoreTel and Mitel are similar companies with very similar portfolios, therefore the synergies are very strong between the two companies.
Mitel has a history of land grabbing in recent years, so having similar product portfolios and the opportunity to acquire thousands more customers is a big tick in the box for Mitel.
Here’s what their latest portfolios looks like:
| Mitel versus ShoreTel Comparison | Mitel | ShoreTel |
| On-Premises PBX/UC | Yes | Yes |
| Hybrid UC | Yes | Yes |
| Dedicated Cloud UC | Yes | Yes |
| Multi-tenanted UCaaS | Yes | Yes |
| CPaaS | No | Yes |
| Contact Center | Yes | Yes |
| Global Cloud Comms | Yes | Limited |
| Proprietary IP Phones | Yes | Yes (Limited range) |
| Open SIP Phones | Yes | No |
| DECT / Wi-Fi Sets | Yes | Yes (Limited range) |
ShoreTel also goes to market via channel partners in the same way. Although Mitel also have a direct model (predominantly in North America) it’s a good guess that Mitel will be retaining the sales model for ShoreTel partners.
What’s interesting is that here in the UK ScanSource Imago distribute ShoreTel and Trust Distribution distribute Mitel’s SMB products. It’s anyone’s guess what will happen there. If either one loses out, then the consequences aren’t good for the losing party.
In a nutshell
- Market share – Mitel slips into UCaaS #2 allegedly
- Customers – More systems to upgrade, displace and migrate
- Innovation – ShoreTel has Summit (previously Corvisa) their own CPaaS platform
- Product Range – Mitel can extend their portfolio across ShoreTel’s product catalogue
- Cost Savings – Mitel will naturally be able to reduce ShoreTel’s overheads due to operating in the same geographic locations and having many people doing the same jobs
- Talent – ShoreTel have some exceptional skills in areas Mitel do not
What next for ShoreTel Partners and Customers?
If we briefly look back at Mitel’s most recent PBX acquisition of Aastra Technologies not a great deal changed for Aastra partners. Mitel’s strategy seems to show complete support for more platforms in their portfolio. In fact, with the recent announcement of Mitel CloudLink, they are even developing a software platform that will help integrate and connect up 3rd party phone systems like Toshiba (now Mitel owned).
- Mitel will inevitably value ShoreTel’s partners
- ShoreTel partners and customers will enjoy a great range of products and services in more countries
- ShoreTel’s products will continue to be developed
Expect some change...
Mitel has been making some cutbacks recently in terms of staff, which kind of makes sense knowing now what they’ve been working on in the background. The ShoreTel acquisition expands Mitel’s global workforce by another thousand or so employees, I’d expect to see some restructuring once the dust settles and more centralisation back to Mitel’s North American ‘HQ’ in Dallas. Naturally for customers this means changes in processes and possibly people, but you’ll also win on the flip side.
