10 Things Mitel And ShoreTel Partners Need To Know About The New Mitel

Welcome To The New Mitel

With Mitel closing its $530 million acquisition of ShoreTel on Monday, CRN takes a deep dive into the market, partner and customer impact of the new company.

The purchase marks one of the largest unified communications mergers in years, creating the No. 2 player in the global UCaaS market. As the UC market transitions to the cloud and with so few on-premises UC vendors left, partners are excited about the future.

"This brings a lot to the market," said Joe Rittenhouse, president of business development and managing partner for Converged Technology Professionals (CTP), a Crystal Lake, Ill.-based solution provider and ShoreTel partner. "You took two big powerhouses and combined them, so that definitely changes the landscape … From a competitive perspective, it's good for the customers; it's good for the channel and good for the ecosystem."

Here are 10 things you need to know about the new Mitel:

ShoreTel's CEO Is Leaving

A ShoreTel's spokesperson confirmed to CRN that CEO Don Joos is leaving the company. "He's looking to move on," said the spokesperson.

Joos joined ShoreTel in 2011 as vice president of global services and later served as senior vice president of business operations. In August 2013, he was appointed President and CEO of ShoreTel. Joos did not respond to a request for comment.

Turns Up Heat On 8x8, RingCentral

Both ShoreTel and Mitel partners said the new combined company is laser-focused on winning more deals and taking share from its two biggest UC cloud rivals: 8x8 and RingCentral.

"With some of the applications that Mitel can bring to the table and some of the automation that ShoreTel brings to Mitel on the backend for delivering the cloud service, I think we'll be better able to compete with the 8x8 and RingCentral's of the world," said David Kaiser, president and CEO of Global CTI, a Bakersfield, Calif.-based solution provider.

"They now have the strength to take their platform ShoreTel Connect – which is an outstanding platform – and really push it through to completion so it can start gaining market share against 8x8 and RingCentral," said Alan Burdine, President and COO of CRI, a Chattanooga, Tenn.-based solution provider and longtime ShoreTel partner. "I think Mitel will get that into a top three position in a much faster time than ShoreTel would have been able to."

No Product Disruption

Both Mitel and ShoreTel customers can continue to count on the same cloud and on-site solutions they have, with Mitel saying it will provide ongoing service and support for all ShoreTel products throughout their life cycles. Customers and partners will be notified and updated in advance of all product announcements.

"Giving those reassurances back to the customer base is a smart play not to disrupt the base and keep everybody in line," said CTP's Rittenhouse. "That's an important factor for us for sure, and our customers are happy to hear that."

ShoreTel's International Boost

Although it might take some time, ShoreTel partners were bullish about new international opportunities with Mitel.

"If you combine their previous acquisition of Aastra – Mitel got a lot of international presence – and one thing that 8x8 has a stronghold in is an international presence. With the ShoreTel acquisition, being able to blend the best of both worlds there, they now have a large international presence where ShoreTel was struggling to get that large foothold before," said CTP's Rittenhouse. "It will take time to develop, but now 8x8 has some serious competition from an international presence point of view."

On-Premises Focus

Several ShoreTel partners recently met with Mitel top executives to discuss the future. Solution providers said they were relieved to hear Mitel's vision of keeping on-premises a crucial focus of the new company.

"This is going help complete some things that ShoreTel was struggling to complete just because of the size of Mitel. [ShoreTel] Connect had been struggling , that is the seamless platform that was consumable in the cloud or purchasable as a premise solution. Unfortunately, ShoreTel focused so much on cloud, cloud, cloud – they sort of forgot about premise. Mitel seems to have a really good balance on what premise opportunity still exist and what cloud opportunity exists," said CRI's Burdine. "So if you ever want to bring it to premise -- you can -- and you can have the same experience. That's something that RingCentral and 8x8 can't do because they don’t offer that. In today's enterprise, we still see that as a viable opportunity and were happy to hear that from Mitel."

$1.3 Billion Company

The acquisition will give Mitel annual sales of more than $1.31 billion, according to Ottawa, Canada-based Mitel, and will double Mitel's UCass revenue to $263 million. The company is also targeting $60 million in cost synergies by 2019.

Channel Synergies

Some of the ShoreTel partners who recently met with Mitel said they were impressed by the dedication and focus the executives had on ShoreTel's channel.

"We didn't know what was on the Mitel side, but we went and met with Mitel channel leadership in Dallas, we were very impressed with the team, with their vision for the future, with their strategy and the way they're planning on embracing the ShoreTel partner community," said CRI's Burdine. "We're really excited about it. They see the personality of the ShoreTel partner community as very desirable."

3,200 Partners, 4,200 Employees

The combined company will have approximately 3,200 channel partners and a broader communications and collaboration product portfolio. Mitel, which will continue to be based in Ottawa, now has a global workforce of approximately 4,200 employees.

Strong ShoreTel Product

Partners are bullish that the technology synergies between the two vendors will help boost sales. Mitel expects to share the vision for its integrated cloud and applications technologies early in 2018.

" Mitel has some advantages on ShoreTel in some of their technology, especially in the contact center space," said CTI's Kaiser. "So I think ShoreTel is going to be able to leverage some of the Mitel technology onto some of the ShoreTel systems -- like endpoints, phones, handsets – so they've got a superior product there being able to bolt-on that contact center to ShoreTel. Those things will make the ShoreTel product stronger."

McBee Leading The Way

Mitel current CEO McBee will lead the combined organization as ShoreTel's CEO departs. McBee has been President and CEO of Mitel since 2011.

"Digital transformation is rapidly changing business models in every industry and every corner of the globe, opening the door to disruptive opportunities for companies to grow and compete. For businesses, moving to a cloud communications and collaboration system inside their own organizations is a natural first step on their digital transformation journey,’ said McBee, in a statement on Monday. ’Mitel and ShoreTel are now stronger together and even better equipped to help take our customers to the cloud, seamlessly and simply."