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ShoreTel acquisition boosts Mitel's CPaaS, SMB portfolio

Analysts discuss how a Mitel-ShoreTel merger fuses two complementary portfolios that could create a stronger competitor against Cisco, Microsoft and Avaya.

Unified communications analysts have hailed Mitel's $430 million ShoreTel acquisition as a smart move that will combine complementary portfolios and benefit small and midsize businesses.

Analysts recently blogged about the Mitel-ShoreTel deal, which was announced in late July. The combined company could become a "champion of small and midsize businesses in a way that competitors are not" and offer a solid alternative to Avaya, Cisco and Microsoft, according to Robin Gareiss, Nemertes Research president.

Gareiss wrote that ShoreTel's operating costs for IP telephony and unified communications (UC) have traditionally been one of the lowest among UC providers for small and midsize businesses. With the ShoreTel acquisition, Mitel can reduce its own operating costs by learning from the simplicity of ShoreTel's engineering.

ShoreTel customers have given the vendor high marks for its technology, value and customer service. However, ShoreTel's ratings have declined this year, according to Gareiss. She said Mitel must examine what issues caused the decline among customers and address them immediately.

Bringing together complementary portfolios

CPaaS is a growing market and presenting competitive challenges to UCaaS solutions.
Elka Popovaanalyst, Frost & Sullivan

The two companies are also complementary in terms of channel, verticals and geography. According to Mitel, there is little channel overlap between the two companies.

ShoreTel has strengths in verticals such as healthcare and education and has a strong U.S. user base on the west coast and northeast. Mitel, on the other hand, is stronger in the hospitality and retail verticals and in southwestern and central U.S., according to ZK Research analyst Zeus Kerravala.

Constellation Research analyst Alan Lepofsky said he was curious to see how the two companies will combine their portfolios. Both companies offer collaboration software that blend call center, voice over IP, web conferencing and team messaging.

ShoreTel acquisition brings Mitel to CPaaS space

With the ShoreTel acquisition, Mitel also gains a foothold in communications platform as a service (CPaaS). Mitel has lacked a CPaaS offering, but will gain one through ShoreTel's Summit platform. ShoreTel acquired the CPaaS platform after buying its developer, Corvisa, in January 2016.

The Summit platform will give Mitel opportunities to expand its communications portfolio and offer cloud and on-premises customers tailored services, Frost & Sullivan analyst Elka Popova wrote in a blog.

"CPaaS is a growing market and presenting competitive challenges to UCaaS solutions," she said. CPaaS, however, also enables UC providers to provide a more holistic approach to their communications services.

Kerravala said as digital transformation becomes the norm for organizations, communications infrastructure needs to be programmable, and havin a strong API platform is key to success for UC vendors.

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