Mitel, ShoreTel Partners Pumped By UCaaS Potential Of Combined Companies

Mitel and ShoreTel partners are bullish about the enterprise opportunities that will result from the combination of the two companies especially around scaling ShoreTel's Communications Platform as a Service (CPaaS) solution.

"Mitel is making this acquisition of ShoreTel, now that they have a premises, a hybrid and a cloud [solution] ... Now Mitel has a CPaaS solution which is something that is a critical component of what the future will be," said Joe Rittenhouse, president of business development and managing partner at Converged Technology Professionals, a Crystal Lake, Ill.-based solution provider and ShoreTel Platinum Partner.

"CPaaS enables Mitel to expand upon that across their existing channel and bolster that back-end of the ShoreTel channel … RingCentral and 8x8 don't have that," Rittenhouse said.

[Related: Mitel Acquiring ShoreTel To Create A $1.3B UCaaS Powerhouse]

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"CPaaS is agnostic of cloud and premises. For Mitel to get this CPaaS solution along with the assets, the customer-base and the channel, it makes them a very very big player in the industry," said Rittenhouse.

He added: "CPaaS gives them an opportunity to penetrate the enterprise market space considerably more. So with this acquisition, they can go upstream more in the Mitel channel to the enterprise market space – that's why this strategy makes a lot of sense. This is a really good thing for the channel."

Ottawa, Canada-based Mitel revealed on Thursday its intent to acquire ShoreTel in an all-cash deal for $530 million, which is expected to be completed in the third quarter of 2017. The combined company will be headquartered in Ottawa and operate as Mitel.

It's worth noting that Mitel has been hunting this deal for years, since at least 2014. In the most recent round of talks, ShoreTel turned down a $574 million bid from Mitel less than a year ago. Now, having apparently negotiated a $44 million discount, Mitel adds another trophy to its wall.

Don Gulling, president of Verteks Consulting, an Ocala, Fla.-based solution provider who partners with ShoreTel and Mitel, said the new Mitel company would have more firepower against the likes of UCaaS competitors 8x8 and RingCentral, which have a $1.3 billion and $2.6 billion market cap, respectively.

"In this industry, size is definitely power," said Gulling. "The larger scale company will have larger teams, bigger marketing and development budgets … The combined company will have a great story to tell."

The new company will have approximately 3,200 channel partners and a broader communications and collaboration product portfolio. After the close, Mitel will have a global workforce of approximately 4,200 employees.

Partners said combining two global companies will give the channel a larger presence in the enterprise market.

"Partners going to have considerably more presence globally and so managing their global presence is going to allow them to dominate that enterprise space," said Rittenhouse. "The cloud enterprise has yet to take off. So taking two international companies that have a large international footprint with a cloud portfolio is going to enable them to have a significant advantage over the other incumbent carriers."

ShoreTel has been fine tuning its CPaaS go-to-market strategy since acquiring Corvisa in 2015, according to partners.

ShoreTel's stock climbed 28 percent on Thursday to $7.48 per share. A year ago, ShoreTel's stock was sitting at $8.30 per share. Mitel's stock price also rose on the news, up 4 percent to $7.80 as of Thursday afternoon.