Mitel Changes

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Mitel announced several significant changes today – about three months after hiring Rich McBee as CEO. I am traveling this week, so just a quick review of the press release.

Mcbee was to smplify the business! Mitel has become a very complex organization. This is not the first time they have announced the obvious need to simplify, but I suspect this one has more teeth. A reorg leaves Mitel with two geographic sales organizations and three business units. The two sales organizations are N. America and the rest of the world. Philip Keenan heads local sales – a formal end to the Inter-Tel regime that Mitel acquired. Keenan has been at Mitel for about 9 months and brings work experience from Nortel and Polycom.

Ron Wellard rises to Mitel GM and EVP. This ensures Mitel will remain engineering focussed. No change as far as I can tell to its NetSolutions business which Jon Brinton continues to head it up. NetSolutions you ask? yes, among other things Mitel is in the carrier business (rebranded wholesale) including cellular (MVNO). NetSolutions also provides hosted services based on Mitel technology (AnyWare). Ryan Donovan gets promoted to GM of the distribution unit, DataNet. Mitel Distribution is not simply a department, but a full fledged business unit that distributes numerous brands to even non Mitel resellers.

Bigger news:
Also announced is the departure of Paul Butcher who has been President for quite some time. Evidently there is a changing of the guard and Paul must have had some Don debris. Paul had a nasty habit of saying what he was thinking which I always enjoyed.

McBee also announced a laser focus on the mid market; specifically 100-2500 user organizations. This seems pretty reasonable – although Mitel’s products are certainly capable of larger implementations, it hasn’t had much success there. A bit more surprising is the lower end of the spectrum… Inter-Tel was quite sufficient at Smb, and Mitel paid a pretty penny for the company. This is probably bad news for the Inter-Tel 3000 which was quite suitable for a medium house and it might be a while for another Mitel system to show up at Costco.

The next shoe is more focus on the indirect channel. That would be the channel that has been competing against some 40 Mitel branch offices across the country acquired with Inter-Tel. The direct sales effort will  be focused on a select group of customers… sounds like layoffs. This will likely create a powerful shot in the arm for Mitel dealers as they pick up the un-selected customers. Great news for the channel.

Lastly, McBee reminded us that Mitel has a leg up in virtualization and plans to exploit it. In other words, Mitel paid a fortune for Inter-Tel’s distribution and carrier business.

Mitel has a conference coming up in a few weeks which I plan to attend. I am glad to see McBee is going to stir the pot that was in need of a blender. More information to come.

Dave Michels