We will be blogging away bright and early in the AM, tomorrow, Feb. 27, 2018 but for now congrats to the Mitel team for inking this deal with the MLB. Mitel gear will be in every dugout and bullpen as the season begins March 29th!
Also follow my tweets at @rtehrani.
8:00 am Feb 27th, 2018
CEO Rich McBee takes the stage and immediately discusses the MLB deal – they will be at every event up to the World Series. The new theme is Make the Right Call.
We sold the mobile division and purchased two companies focusing on UC&C – especially cloud migration. Accelerated UCaaS strategy. New talent and capabilities.
From number 5 to 2 in market share. Number one in cloud seats.
“We reach 70 million global users.” See breakout below.
“Every customer will move to some type of cloud.”
“Our strategy is to make everything cloud capable.”
“We will take people to the cloud and then sell productivity applications.”
“We have a proven management team at all levels.”
“We have achieved critical mass in our installed base.”
8:22: CMO Wes Durow takes the stage.
“It’s less about the products you build, its about the services you deliver.”
“New digital nervous system has started to emerge.”
“We’re not an IoT company. We make IoT real-time.”
50 million lines turn over each year. We do really well where 30M lines turn. 50-2,500 lines is our sweet-spot.
We win about 1 out of 3 deals.
“Contact center is moving to IoT.”
Competitive positioning against Cisco Microsoft and Avaya below:
8:40 Bob Agnes EVP Global Sales and Service
Discussion of various cloud models, security and version control. How do you control your implementation? These are advantages of multi-instance. Mitel has both options, allowing customers to choose the best one.
Over one million users use our collaboration tool MiCollab. More customers are deciding on UCaaS based on Collaboration, mass notification, contact center or teamwork.
OfficeLink puts the PBX on a mobile. It can query all your IoT devices as well.
10:40 am Todd Abbot EVP Global Sales and Service takes stage
Great to see Todd after an amazing ITEXPO keynote just two weeks back.
They will be moving from regional to global deployment and focus more on consolidated distribution.
I’ve been in tech my whole life – tech used to start in the US and then move by region. The internet changed that but UCaaS is a regional movement. Companies are going from private cloud to carrier solutions. The market then looks for higher-end solutions. Then it moves upmarket with sophisticated UC like contact center.
Most hardware companies have a real tough time moving to cloud.
25% of our cloud business comes from our installed base. We win 80+% of our installed base.
Our Flex is much more robust than anything else in the market.
We are now deploying in Europe what we deployed in the US 4-5 years ago.
We are uniquely positioned in Europe as they move into greater UCaaS adoption.
In the cloud world, you can never stumble.
We have invested heavily to increase our renewal rate from 81% to 90%.
11:15 am Steve Spooner CFO
Radical pivot to cloud creates near-term headwinds but is the right decision to drive long term shareholder value.
Shoretel acquisition has bolstered retail UCaaS as opposed to carrier sales. Also thanks to acquisition, cloud revenue will now be broken out.
11:48 Q&A panel
Rich McBee: We need to make existing business more profitable. Recurring revenue models have a higher valuation.
Todd Abbott: We are building the infrastructure to get more effective at getting the word out.
Wes Durow: We are remaking the website to be more hyper-personalized.
Todd Abbott: A thousand+ seat customer will move very slowly. Cloud is a new model for them. They take time to plan, proof-of-concept and demoing. It’s about 6-12 months.
The CEO Interview
We spent some time with CEO Rich McBee and the company seems to have incredible market position. Most of their large competitors have challenges these days while Mitel has a breadth of cloud and premise solutions that should satisfy all buyers. They can even cloud-enable premise hardware and in the process sell additional services.
From a strategy perspective they are taking the extensive Mitel technology portfolio and making it as Shoretel would say, “Brilliantly Simple.” This is of course easier said than done. Generally, simple solutions have less capability but iOS shows you can indeed have a blend of both worlds.
In addition, apps can now be built in less than a few months instead one or more years – another big improvement. He feels the company has an 18 month advantage over their major competitors.
ey have an 80+% win rate with their current customers and they have a fairly large global footprint with significant marketshare. They have successfully started to transition US buyers to the cloud and they expect to do the same in Europe and elsewhere. The good news is they have a stronger market position in Europe and they have solid relationships powering hosted carrier solutions. In fact, Telepo has over a million seats and counting. Rich believes carriers will own 40% of the US market and 60% in Europe.
Asked about the threat from mobile carriers… Users using native smartphones and decreasing the need for companies to ever need a more complex phone system. Rich responded that the productivity and other features their solutions provide will be needed as companies expand. He touted a single smartphone button which connects numerous people into a conference call as an example.
We’ve mentioned before that Rich comes from Danaher. Execution is a religion there. We’ve interviewed company heads who have been acquired by this conglomerate and they gush over the efficiencies they are able to bring to an organization. We never doubted that Rich would bring some of this to Mitel.
At ITEXPO last year, Mark Straton predicted the future of UC will be Broadsoft versus Microsoft. The former is in the midst of an acquisition and the latter is gaining traction on the high end but seems to be continually rebranding. Neither is the force they seemed to be one year ago.
There you have it. Mitel is very well positioned for the future. Avaya has come out of bankruptcy swinging but their messaging is confused. Cisco needs to describe their post acquisition strategy and Microsoft has to stay with one theme for more than a few years.
An analyst today told me of a friend of his who says his industry is so boring and then contrasted this to telecom where things seem to be in continuous flux and upheaval. Yes, we are in an exciting market and live in exciting times. We look forward to reporting on the future of the market here at tehrani.com as well as @rtehrani on Twitter and of course TMCnet.