Zoom and Mitel’s Hybrid Cloud Partnership: Exploring What It Could Mean for the Industry

September 23, 2024 by David Danto

Zoom and Mitel’s newly announced hybrid cloud partnership, set to take effect in 2025, is looking like it will be more than just another business deal – it could be a pivotal moment in the evolution of both firms, with impacts on the greater industry.  The collaboration brings together Zoom’s robust cloud solutions with Mitel’s expertise in on-premises PBX systems, signaling a shift in how businesses may approach their communication infrastructure. The past norm was on-prem, and the current norm is cloud, but Mitel has been redefining the current norm with a hybrid approach – and some sectors are very fond of that idea.

The Background: Moving Beyond Past Arrangements

Mitel’s previous partnership with RingCentral quietly ended in the last quarter, a fact only made public during RingCentral’s financial update. The exclusive nature of that deal left Mitel with no UCaaS (Unified Communications as a Service) offering of its own, likely relegating the company to a backend commission arrangement where they profited a little bit from losing customers to RingCentral. While effective in some ways, this setup presented issues around account control and sales compensation. Mitel essentially sold its customers to a competitor/partner, an unsustainable model in the long term.

In contrast, the Zoom partnership looks much more synergistic. Instead of essentially selling off customers, Mitel now has the opportunity to sell Zoom’s UCaaS and collaboration tools, such as Zoom Phone, Zoom Team Chat, Zoom Meetings, and more directly to existing and new customers. This hybrid cloud model allows Mitel to retain control over billing and customer relationships, mitigating many of the account control issues that plagued the RingCentral partnership.

What Could Emerge from This Deal?

1. Mitel’s Gains A Meeting Room Solution: This deal could represent a major win for Mitel in the meeting room space. Zoom’s industry-leading video conferencing technology, paired with Mitel’s on-premises leadership, could finally give Mitel a competitive edge in the UC meeting room arena. Many of the meeting room hardware manufacturers are looking for growth opportunities, and this could fit right in with a number of them.
2. Hybrid Cloud UC Solutions: Mitel’s calling this partnership a hybrid cloud model, where its on-premise PBX systems will integrate seamlessly with Zoom’s cloud-based services. This “best of both worlds” approach could appeal to businesses hesitant to move entirely to the cloud but still in need of modern collaboration tools. Mitel can now offer Zoom’s video conferencing, team chat, and meeting solutions as a complement to its systems, creating a powerful UC offering for enterprises still running on-premises infrastructure.
3. A New Era for Zoom Phone: One of the most significant advantages for both companies is the ability to sell Zoom Phone through what is essentially a new channel that represents a hybrid offering. Mitel will be able to offer Zoom Phone to enterprises looking for cloud-based calling solutions. This creates an opportunity for a blended virtual campus solution that could cover multiple countries. I’m speculating here, but it’s conceivable that offices using a Mitel PBX can integrate Zoom Phone for their smaller branches, all connected via Zoom’s cloud. The flexibility this provides could make it easier for large organizations to either transition gradually to a fully cloud-based model without abandoning their existing investments in PBX, or provide a seamless solution where on-prem calling is desired for some locations but the cloud is just fine for others. This aligns well with Mitel’s push of the concept of “hybrid” in recent months. In addition, Mitel phones, known for their superior functionality compared to standard SIP phones, could conceivably have an upgrade path to fully support Zoom Phone, further integrating the two platforms. By 2025, we may even see Zoom-ready Mitel phones becoming standard for enterprise customers looking to modernize their communication systems.
4. Professional and Managed Services: Another potential outcome of this partnership is the expansion of Mitel’s professional and managed services. With Zoom’s powerful video and collaboration tools now in its portfolio, Mitel has the opportunity to offer a comprehensive range of services, including digital signage, meeting room setups, workplace reservations, chat, and more. Imagine a scenario where Zoom’s workplace reservation system is integrated with Mitel’s hot-desking features – an attractive offering for companies adopting hybrid work models.
5. Zoom Benefits Too: Let’s not overlook how this deal allows Zoom to thrive in a space where Microsoft Teams doesn’t compete. Zoom has now done this twice (with Avaya and now Mitel.) A pattern may be emerging that we’ll have to keep an eye on.

The Future of Hybrid UC Solutions

As businesses continue to navigate the post-pandemic workplace, the savvy observer sees that the cloud is not the end-all, be-all we were promised. Some firms are repatriating data and communications services where security and control are deemed high priorities. The kind of on-prem and private cloud that Mitel has been offering is doing very well in healthcare and other regulated verticals. But that doesn’t mean that these users wouldn’t be able to use some cloud mixed with their on-prem solutions.

I believe the demand for hybrid communication solutions that blend cloud and on-premises infrastructure is on the rise. The Zoom-Mitel partnership seems uniquely positioned to meet this demand by providing a scalable, flexible UC solution that doesn’t force companies to abandon their existing investments. By the time this deal kicks in fully in 2025, we could see a range of new services and products emerge from the partnership, including advanced meeting room setups, blended UCaaS-PBX models, and deeper integration with third-party services.

In the broader industry context, this partnership may also signal the beginning of a new era for UCaaS and hybrid cloud solutions. Mitel’s expertise in PBX systems, combined with Zoom’s cloud prowess, could create a blueprint for other vendors to follow, especially as the boundaries between on-premises and cloud solutions continue to blur.

It also should not be overlooked that RingCentral has adapted since their Mitel deal, and now has a partnership similar to Mitel-Zoom with Avaya. RingCentral has done very well partnering with service providers around the world – which is not as well known as it should be. What they do next may be an interesting subject for another blog.

With 2025 just around the corner, industry watchers will be keen to see how this partnership unfolds and what innovations arise from this collaboration between two of the most influential players in the UC space.