Why a MitelAvaya Merger Would Be Good for the Industry

Next I have to ask myself: Do I believe there’s truth to the rumor? I certainly do think the offer is possible and that it makes sense, as I briefly discussed with No Jitter yesterday. You might think the two companies would have a fair bit of overlap, but their business are complementary. Here are a few proof points: Mitel’s CEO Rich McBee has long stated the industry needs to consolidate and he’s done his part with acquisitions of companies like ShoreTel and Toshiba (its communications systems business). If it were to acquire Avaya, the deal would certainly be bigger than any other purchase Mitel has made… but recall, McBee did go elephant hunting once before when he took a run at Polycom, only to be thwarted by private equity. As the biggest wheeler and dealer in Dallas since J.R. Ewing, McBee has no doubt continued to poke around all premises-based UC vendors not named Cisco and Microsoft. Avaya Continues Mulling Next-Step Options Beth Schultz September 12, 2019 In a brief update, company said strategic alternative review process continues, gave no indication of new expectations for wrapping it up. Source: Synergy Research Group A merger between Avaya and Mitel would create a behemoth of a company, bringing the number two and number three voice vendors together. Synergy Research Group data shows Cisco in the pole position, with about 44% market share, Avaya second at 10%, and Mitel third at 8%, as shown below. Getting historical installed base numbers is difficult, but I believe a combined Avaya and Mitel would hold the industry’s biggest installed base, by far. Mitel’s strength is in small and midsize businesses, whereas Avaya primarily serves large enterprises.While Avaya designed its IP Office VoIP system to crack the code on SMBs, the product has become more of a branch office option for highly distributed enterprises.Mitel has a strong UCaaS solution whereas Avaya’s strength lies in private cloud, which makes sense given its large enterprise focus (see my No Jitter post from earlier this week on why international bank selected Avaya OneCloud to move its contact center operations from the premises to the cloud).Avaya gears its contact center business upmarket whereas Mitel’s focus is down market.Both vendors have strong, broad desktop product portfolios, and while “MiVaya” would need to do some product rationalization, the end result would be a good selection best-of-breed phones.From a market perspective, the larger company would be in a better position to compete with the two 800-pound gorillas — Cisco and Microsoft. As the industry becomes more artificial intelligence (AI)-centric, data and scale are must-haves. On this front, Avaya and Mitel are stronger together than apart. That said, if a deal doesn’t happen, the companies should still be fine continuing down their current trajectories, optimizing their internal resources while leveraging partners for AI. They can still do this, although it would be easier as a bigger company. More to come from this story, I’m sure.Tags:News & ViewsAvayaMitelM&AUnified Communications & CollaborationAI & AutomationAnalyst InsightCloud CommunicationsContact Center & Customer ExperienceVendor News Articles You Might Like Handshake-deal.jpg As revealed in The Wall Street Journal yesterday, Mitel has reportedly put in a bid to acquire Avaya for $20 to $22 per share, for a purchase price of approximately $2 billion. This news, of course, has gotten me to thinking about how a merger between these companies would affect the industry. However, before I get my analysis, I first want to point out that the reported $2 billion purchase price is incorrect. While that might be the current market capitalization based on share purchase price, the figure doesn’t into account the roughly $3 billion in debt Avaya holds. With debt included, the offer would have to come in for a total enterprise value of $5 billion to be of interest to shareholders. I’m also sure Mitel isn’t the only company that’s had interest in Avaya, given its massive installed base and its “who’s who of the business world” customer list. At this relatively low valuation compared to revenue, Avaya is surely an attractive target for other private equity firms, too. In fact, of all the publicly traded UC companies, Avaya is the most undervalued, so any number of investors might be scoping it out. This isn’t a deal that MUST happen for either company to succeed. Avaya’s strategy today is better than it has been in a long time. Mitel’s strategy, which is growth through consolidation of installed bases, has been clear for years. However, McBee is a disciplined buyer and will never pay more for an asset than he thinks it’s worth, and he’ll never do anything that’s bad for Mitel customers. See All in Unified Communications & Collaboration » Mitel, Avaya Merger on Tap? Beth Schultz August 20, 2019 On the heels of word that Avaya is close to reaching acquisition deal, the focus turns to Mitel and a reported bid of $20 per share. Do I believe Mitel has had and still has interest? Sure. Do I think the deal will happen? Perhaps, but from what I know of McBee, he won’t be pressured into paying a penny more than he thinks a company is worth, so who knows. Synergy.png Tick, Tock, the Clock Is Running for Avaya Zeus Kerravala September 06, 2019 Lots of speculation surrounds Avaya’s future, but mum’s still the word on a final decision. Justifying Workspace Applications: Time to Up the Game Marty Parker September 10, 2019 Communication technology vendors and their value-adding partners must take the lead in defining business justifications for their collaboration and workspace applications. In summary, I do believe Mitel is interested in Avaya, but I’m also sure McBee has probably nosed around for other options, too… Alcatel-Lucent Enterprise, Unify, Panasonic, and others. Whether this week’s speculation translates into an actual deal, who knows. Avaya Still on the Block, Resolution May Come Soon Beth Schultz August 14, 2019 As the company plugs away on cloud sales, CEO Jim Chirico looks to wrap up its review of strategic alternatives in the next 30 days. The biggest challenge a combined company would face is being able to flip the installed base to cloud quickly. If a customer wants to migrate from an on-premises deployment to a private or hybrid cloud, incumbency matters; to retain a customer’s business, Avaya + Mitel could bring together any kind of solution. If a customer wants to shift to a pure UCaaS model, the incumbent is often on the outside looking in as many decision makers don’t consider the “legacy” vendor when making a cloud decision. Here’s where Mitel’s experience in acquiring and incorporating other installed bases matters. While integrating acquired product lines has likely been a harder task than McBee and company anticipated, they’ve learned a lot from their past experiences. Log in or register to post comments read more

Carrier says it has deal with Trump to keep jobs in Indiana

by News Staff Posted Nov 29, 2016 7:12 pm MDT Carrier says it has deal with Trump to keep jobs in Indiana AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email WASHINGTON – Air conditioning company Carrier said Tuesday that it had reached a deal with President-elect Donald Trump to keep nearly 1,000 jobs in Indiana. Trump and Vice-President-elect Mike Pence planned to travel to the state Thursday to unveil the agreement alongside company officials.Trump spent much of his campaign pledging to keep companies like Carrier from moving jobs overseas. His focus on manufacturing jobs contributed to his unexpected appeal with working-class voters in states like Michigan, which has long voted for Democrats in presidential elections.The details of the agreement were unclear. Carrier tweeted that the company was “pleased to have reached a deal” with Trump and Pence to keep the jobs in Indianapolis.A transition official confirmed that the president-elect and Pence, who is ending his tenure as Indiana governor, would appear with Carrier officials Thursday. The official insisted on anonymity because the official was not authorized to discuss the trip ahead of an official announcement.Trump said last week that he was “making progress” on trying to get Carrier to stay in Indiana.In a September debate against Democratic rival Hillary Clinton, he railed against Carrier’s decision to move hundreds of air-conditioner manufacturing jobs from Indianapolis to Mexico.“So many hundreds and hundreds of companies are doing this,” Trump said. “We have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States.”During the Republican primaries, Trump said he would said he would demand that Carrier parent company United Technologies reverse a decision to move two of its Carrier heating and ventilating parts plants to Mexico, eliminating 2,100 U.S. jobs.Carrier wasn’t the only company Trump assailed. He pledged to give up Oreos after Nabisco’s parent, Mondelez International, said it would replace nine production lines in Chicago with four in Mexico. He criticized Ford after the company said it planned to invest $2.5 billion in engine and transmission plants in Mexico.The event in Indiana will be a rare public appearance for Trump, who has spent nearly his entire tenure as president-elect huddled with advisers and meeting with possible Cabinet secretaries. He plans to make other stops later this week as part of what advisers have billed as a “thank you” tour for voters who backed him in the presidential campaign._Follow Julie Pace at http://twitter.com read more