Dominic Black and Matt Townend have spent some of the last two weeks with Mitel at their NEXT conference in Phoenix last week and in Stockholm this week at their Telipo conference.
This has given us a chance to reflect on the opportunity and challenges for Mitel and how they are addressing these. What is absolutely clear from both events is Mitel wants to become the market leader in UCaaS, recognizing the fundamental transformation that is required and the difficulties that they will face to achieve this while also managing their significant traditional UC/premise business.
In Phoenix, they had Geoffrey Moore of ‘Crossing the Chasm’ fame explaining how companies like Microsoft and Salesforce had managed such changes, and how difficult it was. One thing that is clear is that being taken private will give them more ability to execute such a transformation without the ongoing scrutiny and pressures on quarterly performance that a public company faced.
Todd Abbott, EVP of Sales and Services at Mitel identified that to achieve this, they would have to take some fairly radical steps and move from being focused on partners to focus on customers, from being on-premise centric to cloud centric, from transactional sales to customer lifecycle sales and from product to customer focused.
These are obviously great words but he also announced some of the practical steps to achieve this, highlighting how they were moving partners under Tier 2 distribution and focusing their go-to-market towards direct enterprise engagement and making a large investment in high touch and inside sales to drive customer engagement. It was clear that their Mitel Connect product aimed at the SME was going to be a focus for growth in UCaaS user base with investment particularly in an agent sales channel to compete head-on with RingCentral and other providers. Mitel Connect is effectively positioning Mitel as a service provider head-to-head with these players.
The topline strategic intents apply to both US and their European markets, but the execution is likely to be different, with Service Providers being more important in Europe and their Telipo business. What was encouraging to see that they have brought Rami Houbby on board as VP of Cloud International, many of our readers will know Rami from his time at NFON and latterly Broadsoft.
The challenges were also clear to us as well during our time at both events, Mitel still have to manage a large portfolio of legacy products which in some cases still deliver significant revenue. Their overall transformation from product to customer focus is not as clear as some of the other changes, with a large understandable emphasis on individual elements of the product rather than the customer’s journey and how these products may play a part.
The area that Mitel can really succeed in is envisioning a journey for the customer from premise to cloud which was not as clear as it might have been. Looking at their cloud solutions, Mitel Flex & Mitel Connect, with Connect being the Multi-Tenant (public cloud) and Flex being Multi-Instance (private cloud), they both look interesting but the product development is playing a little catch up in some areas. Mitel Flex can be offered in multiple countries but only as a Mitel billed service, which is an issue for service providers however if this is resolved it will may open up opportunities for service providers and large channels looking to serve multinational customers. The elephant in the room is how they will manage their existing channel, so that they stay productive and do not feel disenfranchised on this cloud journey.
Cavell believes that this goal will not be achieved without further investment and they may need to acquire further significant cloud customer assets to achieve the goal to position them as a true cloud provider. When they finally go private, we expect that they will make some acquisitions jumpstart their UCaaS presence in the market and the transformation of their business.