Mitel CEO Rich McBee is revamping the UC vendor to target the midmarket, and is relying on the channel to help.
Mitel CEO Rich
McBee has spent the last few days mingling with the people he's most anxious to
court: business users and channel partners.
McBee, who in
January assumed the CEO post of the UC (unified communications) vendor in hopes
of injecting some life back into a company that had become financially
stagnant, has over the past six months reorganized Mitel's business units,
revamped its sales approach and cleared out some of the executives who were in
place when he took over.
For much of
this week, McBee has been in Hollywood, Fla., at Mitel's annual Business Partner
Conference, extolling the company's new direction to the 1,100 or so attendees
at the event. The reaction so far has been positive, McBee said in a telephone
interview with eWEEK.
to [ask], -Did [Mitel] rearrange the chairs, or is there a fundamental change
going on at the company level,'" he said. "It's a fundamental change at the
company level. This is a fundamental shift at Mitel, no doubt about it."
came to Mitel, he replaced Don Smith as CEO and inherited a company that was
less than a year past its initial public offering. Mitel last year had pared
about 20 percent of its workforce, and in its fiscal third-quarter earnings
announcement in March, it posted a net loss of $4 million on revenue of $162
McBee said it also had good technology, including its Freedom UC
architecture, a cloud-based initiative for its software that the company
announced in November 2010. Mitel just collected another Freedom architecture
customer: The Chicago Bears will use the technology for communications and
collaboration in the organization, the team announced June 2.
It was during
those first three months of the year that McBee talked with as many customers,
channel partners and employees as possible. From
those meetings, he crafted his plan to revamp the company's business and
sales strategies, a plan he called "3+1," which he announced May 2. The three
were plans to simplify the business, focus Mitel's product portfolio and change
how the company dealt with the channel. The one was leveraging what McBee said
is Mitel's advantage in virtualization, particularly its partnership with
reorganization led to several executives leaving the company, including
President and COO Paul Butcher. The changes were necessary to get the company
moving forward again, McBee said.
"We needed to
focus our portfolio," he said. "Mitel has a huge amount of technology, and we
were doing a lot of little things [rather than] a lot of big things we needed to
be doing and have done right away."
down the organization into three business lines: Mitel Communications
Solutions, a $500 million business telephony business; Mitel NetSolutions, a
networking business of about $80 million; and Mitel DataNet, its $80 million
hardware and software business. Creating these business lines leads to greater
transparency and accountability, he said, noting that each has a general
manager responsible for its performance.
wanted to zero in on the midmarket, a space with businesses that fit better
with what Mitel is selling. Those businesses-with 100 to 2,500 employees-are
looking for good technology, but are not tied to a single vendor, like a Cisco
Systems or Avaya. They're looking for the right technology regardless of the
name on the products, they want an open architecture and they want choice.
"This is a
group of customers that select best-of-breed," he said.
still work with larger enterprises and smaller companies, but most of its
efforts will be behind the midmarket push.
channel, McBee said the majoritiy of Mitel's sales will be through partners
rather than direct sales. He said that Mitel, with its full-sized direct-sales
staff, had essentially been competing with its partners. Making the change not
only will help Mitel create better relationships with its channel partners, but
will also enable it to reach its target midmarket customers.
"They buy from
trusted advisers," McBee said. "They don't really buy from the vendor."
continue to hold on to some customers, but primarily because of licensing
reasons, he said. Most of Mitel's efforts will now be in fostering the
relationships with the partners.
will be important for Mitel going forward, as it looks to grow its presence in
the highly competitive UC field that includes such heavyweights as Cisco and
Avaya as well as smaller vendors like Shoretel. But it's a market that is
expected to continue growing. Market research firm Gartner expects the space
for UC hardware and software to hit almost $19 billion by 2015.
And McBee said
Mitel is in a good position to grab its share of that. He said that vendors
like Cisco and Avaya are hindered by what he sees as closed architectures,
while companies like Shoretel
offer simpler solutions
that won't always meet the demand of midmarket businesses. Mitel has the open
architecture and the high level of technology that these businesses are looking
for, he said.
to continue to compete with vendors like Cisco and Avaya in the midmarket, but
they're hampered by their reliance on standardization and their high growth
[midmarket] segment, it's best-of-breed, and best-of-breed does not lend itself
to standardization," he said. "I'm pretty comfortable with what we're doing."