Mitel Bets Big On Software With Freedom Architecture

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Also new this week is desktop virtualization with VMware, part of an expanded relationship between Mitel and the virtualization dynamo. Mitel's UC applications combine with VMware View to drive communications needs in virtualized desktop environments.

Finally, Mitel is offering Unified Communicator Advanced Mobile for Android, a client for Android devices that adds features like location-based presence via GPS and Bluetooth on top of the UC capabilities available through Mitel's existing mobile applications. It'll be available in the first half of 2011, and Mitel is promising similar integration with Apple's iPad and BlackBerry's PlayBook.

"We're strongly of the opinion that the end user experience is going to be increasingly driven by mobile devices," Davies said. "As much as car stereos are going away, desk phones are going away. Car stereos will still be there, but are people more strongly bonded to their car stereos or their iPods? That's the reality, and the reality for us is in mobile devices. End users will elect their device, and IT is going to have to provide security controls and comfort. Absolutely the writing's on the wall."

Davies said the greater value placed on software in the UC space should be a catalyst for VARs updating their practices -- or leaving the business.

"Microsoft coming into the market has opened some eyes, but I think the general consensus is that we do have to change with some of this stuff," Davies said. "I do think we will see a number of VARs exit the business, and what we're seeing from the channel perspective is, better have a plan."

The right move for Mitel, he continued, is leaving behind the "walled garden" approach of rival UC vendors, and integrate with other platforms. For VARs, said Davies, that creates a competitive advantage and fulfills the job of trusted adviser to customers.

"Ultimately, you become a consultant service company," he said. "When we're talking to channel partners I hear interest in both models. But everything best of breed is a good alternative, and we put the Freedom piece around that."

"Everything going on in the industry around cloud computing, software as a service, hardware as a service, all of it's changing how you have to go to market, so the fact that we can realign our business and a have a manufacturer doing something similar is good," said Robert Handel, vice president of sales at Cortel Business Solutions, a New York-based solution provider and Mitel partner. "Cap-ex sales are almost a thing of the past, and companies are looking at what it costs them monthly per employee."

Handel said he sees Mitel's move as a stake in the ground for software- and hosted-based UC sales.

"It's exciting to see what they're doing to get away from the big box mentality. I think they're ahead of the curve because their major competitors are still pushing boxes," he said. "We like the application and solutions sell, and that justifies the expense to people. I think in the beginning people thought hosted IP would be only for under 25 (employees), but the appetite is growing into larger applications, and additional feature sets are getting offered."

It's been a busy year for Mitel, which in April had an initial public offering, and in early September confirmed that CEO Don Smith will retire from the company following nine years on the job. At the time, Mitel said Smith would plan to stay on until his successor is named and also continue as a board member.

Davies said Mitel had no update to offer on the CEO search.


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