Mitel Restructuring Will Benefit Midmarket Channel


Mitel this week confirmed an executive shakeup and several changes to its corporate strategy, including plans to refocus itself as a midmarket unified communications and networking vendor that drive more sales through channel partners.

Among the major changes Mitel unveiled Monday is the departure of Paul Butcher, president and COO, effective April 30. Richard McBee, who became Mitel's CEO in January, has assumed the title of president, and the COO role at Mitel has been eliminated. Butcher had been at Mitel for 15 years.

According to McBee, it was time for a number of changes at the beleaguered vendor.

"In evaluating the market opportunity for Mitel, I've spent the last three months speaking with customers, channel partners, industry analysts, shareholders and our internal team," McBee said in a statement. "As a result, I am implementing a strategy anchored by three initiatives in a multistep approach to grow Mitel's business as a unified communications and collaboration provider."

Mitel has continued to struggle following an April 2010 initial public offering, and last year trimmed about 20 percent of its workforce. According to McBee, Mitel will retrench, and look to focus its research and development investment on serving customers in the 100 to 2,500 user space. It will still commit to Freedom, the cloud-focused unified communications architecture that it unveiled in November, and also steer its U.S. sales organization to focus on indirect channel sales.

Mitel will be reorganized into three business units. First is Mitel Communications Solutions, focused on unified communications, collaboration and services sales, headed by newly promoted Ron Wellard, general manager and executive vice president. Second is Mitel NetSolutions, responsible for network and hosted services, mobile services and broadband connectivity, which will continue to be led by Jon Brinton, general manager. Third is Mitel DataNet, which will distribute third-party products to partners and customers, and will be headed by Ryan Donovan, general manager.

Mitel's sales organizations will be divided into North America and international. It will retain a Major Accounts Group to focus on Mitel's larger enterprise customers, but the bulk of its focus will be on midmarket sales through the channel, McBee said.

During a conference call to discuss the move, McBee said Mitel isn't abandoning the "S" customers in SMB, citing the company's successes in that customer band. But the sub-100 market space is more about a "financial transaction," where larger companies in the 100 to 2,500 range look for best-of-breed, he said.

Finally, Mitel will also focus on voice virtualization.

"This means continuing to partner with virtualization leader VMware to jointly innovate in this area," McBee said in a statement. "This has been a significant differentiator for Mitel in acquiring new customers and providing a migration path for existing Mitel 3300 IP Communications Platform customers to Virtual Mitel Communications Director. Our customers have made it clear to us that virtualization is a priority for them and, as a result, is a strong priority for us as well."