Mitel Reinvigorated

There was renewed energy and enthusiasm at Mitel's annual partner and analyst conference held in Hollywood, Florida, in part because of some of the new faces in the company. Mitel CEO Rich McBee (who's relatively new and has been with the company for around two years) set the tone at the event by stating that "Mitel is in great shape," and introduced the conference's theme: Outside In - the Power of Putting Customers @ the Center of Our Business. The company spent time looking from the outside in, starting with the voice of the customer and listening to what customers (and analysts) told them. McBee made the analogy that this exercise was like "a complete physical," from which they made decisions that will guide the company for the future.

Moving forward, McBee said that Mitel is going to:

• Leverage its strength in its core products,
  
  
• Maximize its position in the cloud with its wholesale and resale offerings, and
  
  
• Rapidly expand in the contact center, based on its acquisition of Prairiefyre. McBee noted, "We're very committed to this space," which many of us were happy to hear.

CFO Steve Spooner told the audience that revenues were down five percent from a year ago, but this is the second best performance in the industry. While poking fun at the large debt of one of Mitel's competitors, Spooner noted that Mitel is the only competitor with improved EBITDA margins. The company doesn't have the debt issues of some of its competitors and is in a better position to make strategic acquisitions and investments.

Next up was the new Executive VP & CMO, Martyn Etherington. It was his first time addressing this group, and he really wowed the audience. Mitel has always been known as a technology company rather than a marketing company, but that is changing thanks to Etherington. In an interesting twist, he told his audience of channel partners that while in the past Mitel put its channel partners, products, and brand at the center of its business, the company is now going to put its customers at the center. He added, "There is a sea change happening within Mitel."

Etherington went on to explain Mitel's new focus on "the zero moment of truth" or ZMOT, which, according to Jim Lecinski of Google, "is that moment when you grab your laptop, mobile phone or some other wired device and start learning about a product or service you're thinking about trying or buying." People now go online and do research by using a search engine, going to forums and review sites, etc., before purchasing a product. Etherington explained, "The Internet is the new tradeshow and where you go to get information about vendors, etc.... People are looking for information about you from the Internet, and you have to change the way you communicate with customers."

To that end, and to help its channel partners, Mitel is going to focus more on understanding its customers and the buyer's journey - how they buy products and make decisions. Etherington announced that Mitel is now focusing on ZMOT as a big investment, which will start generating more leads, which Mitel in turn will share with channel partners to help grow their business. He laid out several steps that Mitel will take, including demand generation, syndicated content for its partners, rebranding, a new website, an improved partner locator, a new Mitel customer interaction center to make it easier for partners to communicate with Mitel, and more. I don't want to give away too much of what Mitel will be doing, but it's clear that Mitel is being much more aggressive when it comes to marketing and focusing on the customer.

The second new member of the executive team introduced was Executive VP Sales, Americas Region, Joe Vitalone. Vitalone, formerly of ShoreTel, discussed some organizational changes, such as separating Mitel's channel and direct sales business, a new simple five-step selling process, new compensation plans, hiring new talent, and more. While 65 percent of its revenues currently come from partners, Mitel wants to increase this to 75 percent.

Based on the spontaneous applause during these presentations, comments from the partners sitting near me in the audience, and discussions with both channel partners and technology partners throughout the event, it's clear that Mitel is on the right track, and is reinvigorating its partners.

Of course there was lots and lots of talk about the cloud - Mitel has had a cloud offering for a long time, and offers various options to customers and partners. Mitel rebranded its cloud offerings as MiCloud, MiCloud for Service Providers, and MiCloud as a Service. Partners can host services from Mitel's data center or white label the service and sell it from their own data center. Mitel continues to offer Mitel Anyware, which is hosted and managed by Mitel and sold directly to end customers. There was a lot of discussion with the analysts about conflict with partners and SPs that have hosted Mitel offerings competing with Mitel's own hosted service. According to a couple partners I spoke with that host the Mitel service in their own data centers, there really isn't much conflict and it isn't an issue to them. It's not clear whether all partners feel this way, and there's always bound to be some conflict.

There was also a new focus on contact center, and the partners I spoke with were very excited that they can now offer a Mitel contact center solution, rather than having to work with third-party PrairieFyre. Of course PrairieFyre doesn't offer the full contact center stack of products and capabilities, such as workforce management and optimization, outbound dialing, etc., so Mitel will still need to work with partners in these areas (although no one will be surprised if Mitel acquires its partner Oasys to provide some of these capabilities).

We didn't hear too much about virtualization, partly because this is old news to Mitel, which was the first vendor to virtualize voice in a VMware environment, and has had great success in this area. We did, however, hear about Mitel's new OEM partnership arrangement with cloud-based video vendor Vidyo, which also leverages a virtualized environment, making it easy for the products to easily integrate. The two companies have a common view of the value of software-centric solutions, and have integrated the products and user experience. Vidyo is a disrupter in the video arena, and provides Mitel with an attractive video solution for its customers.

While the analysts had the opportunity to spend a lot of time with CTO Jim Davies, he told me that this is the first year he wasn't presenting on the big stage at the partner conference. We both agreed that this was a sign that Mitel, which has always been known as a technology company, wants its partners to know that it's now focusing more on sales and marketing to help grow its partners' business, which of course means growing Mitel's business.

Mitel still has some work to do in terms of simplifying its nomenclature, battling competitors that have more name and brand recognition, and beefing up its contact center offerings. While Mitel laid out a great marketing and sales strategy, it's up to the channel partners to buy into this and make it work. A large portion of Mitel's channel partners are "old school telecom guys" who may have a hard time transitioning to the new virtualized, software-based, cloud-centric world. I was happy to speak with some partners that aggressively embraced these changes, and obviously there are many others that are eager to move in this direction. It will take a lot of training and education on Mitel's part, and the company will have to dedicate resources to help its partners be successful. It seems that Mitel is ready to take on this task - let's hope its partners are ready also.