Packet Fusion interviews Mitel’s CEO about their new direction

Packet Fusion CEO, Matt Pingatore recently had the pleasure of dining with the CEO of Mitel, Tarun Loomba.  Tarun has been my Executive Sponsor at Mitel for 4 years now, and we try to meet twice a year to catch up and talk about the industry. No fault of either of ours, but it had been over a year since a live in-person meeting which is always more fruitful and entertaining.

What I have noticed about Mitel over the past 6 months is they truly have their direction positioned and are all marching to the same goal, which is to own the UC space.  

Traditionalists would call the UC (Unified Communications) space the Premise Base PBX space, while the UCaaS (Unified Communications as a Service) would be the cloud space.

With Mitel’s recent $800M purchase of Aptos (Seimans), they are truly doubling down on owning the UC market.  They now have bought InterTel, Ericcson, Toshiba, Aestra, ShoreTel, and now Seimans.  With Avaya going Chapter 22 (chapter 11 twice), it seems there is nothing to buy there, which would only leave a couple left to buy to own the entire market other than, of course, Cisco.

Tarun started by educating me about the UC market, which is still 50% of the phone seats on the planet; it is a huge market.  We live in a bit of a bubble here in California, which is leading the charge in cloud adoption, so it doesn’t seem right that the planet is still less than 50% transitioned to UCaaS.  It is truly a massive market and a massive opportunity for them.  By consolidating applications, phones, and gateways, one could actually make some money at the premise game.

Tarun then corrected me that the cloud is not just a public cloud.  Private cloud is still a very viable delivery methodology, and Mitel has optimized its MiVoice Business to work in this scenario.  There are certain verticals (Healthcare, Financial, High Education) that still embrace the Private Cloud, and Mitel is going after those verticals.

Cloud means different things to different people.  Multi-Tennant Cloud, which is the likes of Ring Central, 8×8, Dialpad, Zoom, etc. is what I would call true cloud as everyone is sharing the same code and the same infrastructure, resulting in benefits from scale, support, elasticity, feature set, etc.  Mitel offers a PBX in a Colo, which is termed Private Cloud.    This private cloud is appealing to certain enterprises who want more control of their environment.  Mitel is certainly excelling in the Private Cloud space.

Mitel has 3 go to market strategies right now.

1. Stay Premise
2. Upgrade to Private Cloud
3. Upgrade to RingCentral

​​​​​​​With their partnership with RingCentral to move their Premise and Cloud customers to Ring by offering easy database transitions, phone ownership transfers, early termination fees, and pricing concessions, it seems Mitel 3 has viable go-to-market strategies.

My next question to Tarun was, what does Searchlight, who is the Private Equity that owns Mitel, do with them? They bought Mitel with the premise of owning the UCaaS world, but Zoom and Teams put a damper on that plan, so they killed their Mulit-Tennant UCaaS product and doubled down on the premise market, and bought Seimans.  Some day Searchlight wants their money, so make no mistake.  Not sure there is another Private Equity firm out there to stomach this space, so how does Searchlight get their return? Tarun’s response was a possible Public Offering, not as a growth/speculation stock, but as a value stock that cash flows positively.  With the tides changing in the stock market and profitability mattering now, this really could be an option.  Time will only tell on this.

It is truly disappointing that Mitel is shutting down MiVoice Connect (ShoreTel Orange), but I truly understand the reason for doing it.  We at Packet Fusion are committed to supporting your system for as long as humanly possible.  Later this year, Mitel will announce the official End of Life for Connect.  What we expect is End-of-Sale (EOS) in a couple of months, meaning no new logos can buy Connect.  End of add-on sales to be 12 to 24 months from EOS, and end of Technical Support within 4 to 5 years after EOS.  So we have till 2028/29 for the life of Connect.  No new features, but critical OS updates, patches, and security updates will be provided until 2028/29.

We would love to work with you on what the right path is off of Connect.  Is it an upgrade to another premise system from Mitel (MiVoice Business)? An upgrade to RingCentral? Or is it another provider altogether (Teams, 8×8, Zoom, Dialpad, etc.).

Let Packet Fusion help you with this

We have done over 150 prem-to-cloud transitions and offer our services at no charge.  Let us run our process for you.  Please reach out to us to Packet Fusion to start the process.