Comms Dealer caught up with Mitel CEO Rich McBee (pictured) and newly promoted Graham Bevington, now Worldwide Executive Vice President and Chief Sales Officer, at the company's recently refurbished London offices to find out what direction the comms giant is taking and what this means for its traditional and future UK channel partners.
Most readers of this magazine will know that Mitel is a big business, a very big one. Many, however, may be unaware of the true scale of its global footprint, so here are the facts. The company now operates in over 100 countries, has 60 million end user customers, last year netted $1.1 billion in revenue and has the leading market share for the total PBX market across Western Europe and across EMEA.
Aside from this growth and success it now has the charisma and cash to get businesses it takes a fancy to up the aisle when it wants. The recent courting and acquisition of the mobile software business Mavenir Systems for $560 million is a case in point. For Mitel, it was a missing piece in a Unified Communications and cloud growth strategy that still has the channel at its core, as Bevington was keen to stress.
"I have been in the UK with Mitel since January 2000," he said. "Our go to market strategy was channel-based then and it still is. We haven't changed. We have been consistent and continually drive our business model towards the channel. The challenge our channels face with the rest of the market is changing business models, and what you are getting with us now is an evolution of where the technology is going and an ability to migrate with it."
Helping more partners take a walk across Mitel's bridge to cloud-based services is paramount according to McBee who unveiled a staggering fact. Mitel maybe the No 1 PBX supplier in Europe and EMEA, but now has only 10 hardware engineers in the whole company out of 700. "And you know what they work on? The sets. Everything we have is software," said McBee.
This sea change in Mitel's business towards software-based services is borne out by the success its partners have achieved in migrating customers to cloud communications. In the fourth quarter of 2014, Mitel installed over 177,000 new cloud seats, including over 24,000 recurring cloud seats. And year-on-year, Mitel's recurring cloud seats have increased to 269,155, up 122 per cent and its total installed cloud base has increased to over 1,039,000 seats, up 83 per cent.
This success has been achieved across all business sectors which has been central to McBee's strategy in building a new Mitel. "What I like about the company now is that we can address SMB, medium enterprise and large enterprise," he added. "In every one of the countries we operate in there is a different mix of those, but we have the solutions and the products to cover it all. It's a new Mitel. People are getting the sense that something special is happening. There is always some kind of forward movement with this company.
"And I really think that is the case country by country. Because if you take an enterprise country they see us entering into the cloud, they see us in contact centres, they see us building up SMB. If it's an SMB country they see we have cloud and large enterprise solutions. I feel that Mitel is the healthiest it has been in a long time and the opportunities ahead of us are bigger than we have ever seen because we can literally play in large, medium and small on premise markets, public and private cloud and contact centres across the board. And with the acquisition of Mavenir, we are moving into the mobile space so we have all of the mobile technology, which is just a natural evolution in the enterprise space.
"The advantage we saw in the market is that Mavenir is an all software company. There is a seam in the technology term between 3G to 4G. It is a fundamental change at the core network going to an IP network. If it was still a circuit switched network then there is no way that we could compete because Alcatel-Lucent, Ericsson, Huawei and Nokia Siemens have really got that locked up. But the strength of those companies is also their weakness. They all have a huge heritage of dedicated hardware to make the circuit switch network work.
"The 4G network is all software at its core. That is key. That is the seam that Mavenir worked itself into. With this deal carriers and resellers will be able to provide bundled packages with the mobility and fixed enterprise features built in. They are going to become pretty sticky with customers and they won't have to introduce another player into their sales process. It's not a tomorrow thing, it's a future thing and it's exactly why we made this strategic acquisition. It's a growth pillar for us into big markets that are transforming."
Campaigns are already underway to attract mobile service provides into the Mitel partner family alongside those that have already met with success, as Bevington explained. "We have a specific campaign built around trying to attract and develop that side of our business. We have recruited mobile service provider Olive and it is now one of our most successful UCaaS partners.
"Mobile service providers have a different mentality and a different structure. Olive is a shining example of a mobile service provider that has found our UCaaS service easy to sell because they take it for what it is, sell it in its purest sense and have achieved some great successes. This is about simple, standard or executive solutions. It's an extension of a cloud service the client already has.
"Having said that, I actually think that our traditional channel is evolving and migrating all the time. What we are doing with Mavenir says to the market that we understand that fixed and mobile are coming together, and working with Mitel is a good place to be. We have created a company through Rich that is capable of getting there, but then as we go to recruit alternative channels such as digital print, which I think is a very exciting channel opportunity, we'll be very specific about how we recruit them and what we offer through them. We will make sure we don't compromise our traditional voice resellers. That is where we are trying to go."
Underneath all this, as Bevington stressed, Mitel's SMB business continues to flourish through its developing relationship with Trust Distribution. "Our fastest growing business is our MiVoice Office 250 business in the UK with Trust Distribution," Bevington commented. "It was our best performer last year in terms of units, in terms of percentage growth and in terms of value percentage. MiVoice Office 250 unit sales have increased by 20 per cent in the last 12 months and our value has grown by seven per cent. We have targeted other vendor resellers and won them over."