Menu
Mitel takes aim at Avaya with ShoreTel bid

Mitel takes aim at Avaya with ShoreTel bid

Anyone thinking about signing a deal with ShorteTel for unified communications gear might want to take a closer look now that Mitel has made public its hopes to buy the company.

Anyone thinking about signing a deal with ShoreTel for unified communications gear might want to take a closer look now that Mitel has made public its hopes to buy the company.

Mitel says it's prepared to pay 24 per cent over the price last Friday of ShoreTel stock (about $US540 million), but ShoreTel says 'no' and won't negotiate, according to a letter Mitel's CEO wrote to the chairman of ShoreTel. Despite the rebuff, Mitel plans to persist and that means ShoreTel customers should be vigilant.

At the very least, businesses weighing whether to buy ShoreTel gear should find out the likely impact of a merger, says Ken Landoline, a principal analyst with Current Analysis. "Beat up your channel about what does this mean for me?" he says.

+[Also on Network World: Microsoft's Lync surging as PBX choice in North America; Mitel and Aastra to Merge, Creating a Billion Dollar Company]+

Likely it won't be anything bad because Mitel wouldn't want to alienate ShoreTel customers by shutting down products they have invested in and perhaps hope to rely on for years, says Jeremy Duke, CEO of Synergy Research group. "They'd be on thin ice," he says, if they did that. "The market is too competitive. They have to keep the customer base happy."

An unhappy customer base would leave the Mitel/ShoreTel entity open to poaching by the two big unified communications leaders Cisco and Avaya, he says.

Still, potential ShoreTel customers should make sure that the terms of ongoing support for products are spelled out in whatever contracts they sign, says Landoline, so they know they won't be stranded if the company is acquired, and its product roadmap changes.

By making public Mitel's offer to buy the company is putting pressure on ShoreTel's board by bringing the proposal directly to the attention of shareholders. "[W]e have a proven track record of successfully completing and integrating transactions and are firmly committed to bringing the benefits of a combined organization to our respective customers, employees and other stakeholders," says Mitel CEO Richard McBee in an Oct. 20 letter to Charles Kissner, chairman of the ShoreTel board.

If Mitel succeeds, it would move the combined company up the ladder of market leaders by revenue in unified communications - at least in the U.S., says Duke. If U.S. on-premises gear plus unified-communications as a service market share for Q1 2014 are compared Cisco (28.7%), Avaya (13.8%), ShoreTel (8.7%) and Mitel (7.1%) rank numbers one, two, three and four respectively, according to Duke. Post merger, that would put Mitel/ShoreTel in second place and bump Avaya third.

He says the prime motivation for the deal may be to boost Mitel's share of the U.S. market, similar to the way its acquisition of Aastra in January gave it the number 1 ranking in unified communications for Western Europe, Duke says. The Aastra deal also pushed Mitel into the realm of billion-dollar companies by revenue.

Subscribe here for up-to-date channel news

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags unified communicationsSynergytelecommunicationMicrosoftvoipNetworkingShoreTel Cisco Unified CommunicationsAvayaShoretel

Featured

Slideshows

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

Revealed at a glitzy bash in Sydney at the Ivy Penthouse, the first StorageCraft Partner Awards locally saw the vendor honour its top-performing partners with ASI Solutions, SMBiT Pro, Webroot, ACA Pacific and Soft Solutions New Zealand taking home the top awards. Photos by Maria Stefina.

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards
Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

​Synnex and Lenovo hosted 18 resellers for an action-packed weekend adventure in RotoVegas, taking in white water rafting on the Kaituna River, as well as quad biking and dinner at Stratosfare​, overlooking Lake Rotorua at the top of Mount Ngongotaha​. Photos by Synnex.

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip
Show Comments