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Analytical Comparison
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| Analytical Summary |
| Mitel - EC |
ShoreTel - EC |
We are taking a slightly positive stance on Mitel. The company is particularly well established in the SME space, with a long history of serving customers in this particular market segment. The acquisition of Inter-Tel in 2007, which further solidified the company’s position as an SME communications powerhouse, adds revenues, personnel resources, an expanded product portfolio and a greater presence in the U.S. Mitel has a proven record of product innovation. It has regularly introduced new and enhanced applications for mobility, teleworking and conferencing, as well as new end points and peripherals that expand the capability and flexibility of its communications systems. Mitel has a longstanding relationship with Microsoft, which has led to interesting product development (i.e., Live Business Gateway) and joint sales opportunities. In addition to its SME stronghold, Mitel also plays an active role in the enterprise market, with its 3300 IP PBX able to scale up to meet the communications needs of very large sized businesses. Mitel has also shown a certain degree of success in positioning its products as the basis for carrier’s hosted services offerings. With its 3600 Hosted Key System and endpoint designs, Mitel has attracted interest among hosted telephony service providers and the softswitch vendors supplying them (e.g., Tekelec, Natural Convergence).
Mitel, however, has its work cut out for it. The Inter-Tel acquisition solidified Mitel’s role in the North American market for SME communications solutions, did not necessarily help corporate initiatives aimed at increasing the number of enterprise accounts or expanding into Europe or Asia. There were a number of synergies between Mitel and Inter-Tel regarding business models, target customers and point products, and some integration work has been done, however Mitel still must create a cohesive whole between what are now essentially two separate product portfolios. Separately, scalability improvements to its 3300 ICP open up marketing opportunities for Mitel within enterprise accounts; however, Mitel’s traction among large enterprises is limited in comparison to its rivals. Mitel’s Microsoft-based unified communications solutions are competitive, but are grossly overshadowed by alternatives Alcatel-Lucent, Avaya, Cisco, Nortel and Siemens Communications. The company is also beginning to fall behind these rivals which are aggressively targeting large enterprises with advanced FMC, SOA and web services solutions. These same competitors and a host of others are also proving committed to claiming a larger share of the SME market where Mitel has been most successful. |
We are taking a slightly positive stance on ShoreTel. The company has a clear competitive differentiator in its flagship product’s distributed call control architecture and it claims impressive corporate growth over the past few years. The ShoreTel system is now a mature product offering with the average number of users supported per deployment steadily rising. Its competitive product line has been refreshed regularly with new options for customers and resellers. Its growing Technology Partner Program helps the company add value-enhancing third-party options to its solutions, with recent notable additions in the areas of FMC, video, WLAN and edge equipment. ShoreTel’s channel now numbers over 500 resellers. It includes partners needed to combat the robust distribution networks of rivals, and it may improve ShoreTel’s visibility among larger and multinational enterprises. Details of its sales growth over the last several years should help dispel some of the concerns customers and partners may have had about the company’s long-term viability. ShoreTel can point to its debt-free operating status, growing headcount, and overall forward momentum as evidence of its stability, while several of its competitors have recently or are now facing corporate-level concerns.
Despite strides the company has made in building out its offerings, ShoreTel’s portfolio remains noticeably more limited than those from many of its competitors. ShoreTel’s wait-and-see approach toward adhering to the latest trends in communications technology lends a degree of credibility to claims that it lacks the resources needed to be a highly innovative company ShoreTel is now moving into more advanced applications arenas, such as FMC, presence/IM and video applications, yet it trails well behind competitors. Specifically, ShoreTel has lagged in integration with Microsoft OCS and IBM Sametime unified communications platforms, Web services and integration of communications applications with business software. The company has delivered the hooks in its PBX system for connection into carrier networks, but aside from its AT&T relationship for the US, it has not established a comparable set of service provider relationships forged by rivals for product sales and support. Though its visibility is improving, ShoreTel still remains a comparative unknown in the enterprise communications space, particularly in overseas markets, which account for less than 5% of its aggregate sales, while a majority of its channel partners are even less recognized outside their respective and somewhat limited geographies. |
| Description |
| Mitel - EC |
ShoreTel - EC |
Mitel is a developer of communications systems and software for businesses of all sizes. The company has had particular success in targeting small and mid-size businesses, but plays a role in the enterprise market as well. Mitel’s portfolio encompasses telephony (IP, TDM and key) systems, handsets and software applications. The Ottawa-based company was founded in 1972 by Terrance Matthews, who presently serves as chairman and owns a 38% stake in Mitel. CEO Don Smith is a former Mitel sales and marketing executive who left the company to found optical start-up Cambrian Systems. Following Cambrian’s acquisition by Nortel, Smith became President of Nortel’s Optical Internet Solutions division before returning to Mitel in 2001.
Though Mitel is privately held, as a Canadian company selling into the U.S. it files annual revenues with the U.S. Securities and Exchange Commission. The company recorded revenues of approximately $384 million in 2007, $387 million in 2006, and $342 million in 2005. Mitel generates approximately 60% of its aggregate revenues in the U.S. EMEA is the company’s second largest market, comprising about another 31%, while sales in Canada and CALA make up about 8% of Mitel revenues. In August 2007, Mitel closed on its purchase of Inter-Tel, a rival developer of SMB communications systems, for $729 million. Including Inter-Tel’s contributions, Mitel reported $692 million in revenues in its fiscal 2008.
Mitel divides itself into two business segments: Solutions and Services. The former develops voice, video and data communications systems and applications sold to SMBs and enterprises, while the latter consists of direct product sales initiatives, professional services, managed services, and installation, maintenance, technical support services for both voice and data networks. Mitel also resells the telecommunications access services of various carriers. The company operates in more than 90 countries and employs approximately 3,000 people. |
ShoreTel is a publicly traded company (NASDAQ: SHOR), having completed its initial public offering in July 2007 with proceeds of $86.3 million. ShoreTel develops and markets IP telephony systems, along with the messaging, conferencing, contact center, administration, and monitoring software sold with them, for SMB and enterprise networks. Founded in 1996, ShoreTel introduced its first products to market two years later. ShoreTel is based in Sunnyvale, CA and it had approximately 265 people on staff as of the end of its FY07 in June. The company makes its products available in 26 countries and has regional offices in the UK, Germany, and Australia, as well as systems deployed in France, Spain, Singapore, Malaysia, and other parts of the world. John Combs, an industry veteran and formerly an executive with Mitel and Nextel, serves as ShoreTel Chairman, President, and CEO.
ShoreTel’s portfolio is anchored by its flagship ShoreTel PBX platform, a pure IP system featuring a distributed architecture that scales to 10,000 users. It also makes ShoreTel Small Business Edition available for single-site customers with up to 50 users. ShoreTel claims approximately 8,000 voice systems customers, including 3,000 new accounts added in its fiscal 2008. The company also offers its ShoreTel Technology Partner, an initiative to develop, market, and sell third-party products that interoperate with ShoreTel products. The program has approximately 100 participating members. ShoreTel’s customer list includes Premiere West Bank, Viacom, Robert Half International, CNET Networks, Hitachi Consulting, and the City of Oakland California. |
| Markets/Sales Strategy |
| Mitel - EC |
ShoreTel - EC |
Mitel has historically focused communications solutions for mid-market businesses. Nearly half of the PBXs it has sold support businesses with between 50 and 500 lines. More recently, it has increased emphasis on large enterprises and small businesses as well. The Mitel 3300 IP Communications Platform and Mitel 5000 are the company’s flagship products. The former can support both SMBs and very large enterprise installations, while the latter targets only SMB opportunities.
Mitel differentiates its products on the basis of application and desktop end-station innovations, including an array of IP and other desktop endpoints. Development and marketing partnerships with Hewlett-Packard’s ProCurve Networking division and Foundry Networks provide Mitel with the data networking expertise it lacks. A relationship with Microsoft, under which the companies develop presence-based communications solutions, has kept Mitel’s advanced applications set competitive. Tekelec and Natural Convergence deliver hosted solutions utilizing Mitel IP handsets. Mitel’s 3600 Hosted Key System (scaling from two to 50 users) provides additional opportunities among carriers and service providers serving SMB markets.
Mitel employs a combination of a one- and two-tier distribution model that involves distributors and resellers in the sales process. The company claims approximately 1,500 channel partners worldwide. Mitel’s U.S. distributors include Embarq Logistics, Graybar Electric and Tech Data. Approximately 80 resellers in the UK source product directly from Mitel while distributors including Westcon, Crane Telecommunications, Ingram Micro and others serve mainland Europe. Mitel’s internal sales force of approximately 300 staff sells directly to businesses as well as identifies new opportunities and passes them to channel partners. In the UK, Mitel sales are 40% direct, 60% indirect. In the U.S., it’s about 65% direct, 35% indirect. Elsewhere in the world sales are nearly 100% indirect.
Mitel offers professional services and custom application development to customers and resellers. The MiService portfolio includes network assessment, custom application development, lifecycle management, remote data and voice systems management, and funding offerings. Mitel’s core verticals include the education, hospitality, retail, healthcare, government and financial industries. Its core geographies include the U.S., the UK and Canada, while its secondary markets include other European markets, Australia, Latin America, the Middle East, South Africa and Asia. Mitel (exclusive of Inter-Tel) had a 4.0% share of enterprise telephony ports shipped in EMEA in 2007 according to Synergy Research Group. The company had a 5.0% market share of enterprise telephony ports shipped in the U.S. |
ShoreTel positions itself as a distributed IP voice systems supplier to businesses of all sizes. The company’s “Communications Made Easy” marketing campaign is meant to convey ShoreTel’s core value propositions of achieving high customer satisfaction as a developer of solutions that are easy to deploy, manage, and use while providing high reliability in decentralized network environments.
New ShoreTel customers average 60 to 200 IP voice ports per initial deployment. Its largest deployments exceed 4,000 lines. ShoreTel has kept its product portfolio competitive by expanding its line of ShoreGear switches and IP terminals; through continued enhancements to its contact center, mobility, administration, unified communications and monitoring solutions; and via integration with a growing range of third-party products. ShoreTel allies with data networking and security vendors Enterasys, Extreme Networks, Foundry, and Juniper to provide end-to-end solutions and it claims that about half of its deals involve technologies from these partners.
ShoreTel takes both horizontal and vertical approaches to selling its Enterprise Edition PBX, with the retail, professional and financial services, education, and manufacturing spaces among its concentrations. The Small Business Edition platform, which averages 20 users per deployment, is marketed more horizontally. ShoreTel’s sales and marketing efforts focus largely on North America, with expansions into Western Europe and Asia in progress. Product sales account for around 86% of ShoreTel’s revenues, and services for 14.
90% of sales are through channel partners. No single partner accounted for more than 10% of ShoreTel’s 2007 or 2008 revenues. ShoreTel’s channel strategy relies on select partners, decreasing reseller conflict by not saturating the market with its products. 95% of ShoreTel’s sales revenues are derived from the U.S. through 450 resellers, systems integrators, and VARs. AT&T, Black Box, and CDW are representative of U.S. partners with national footprints. ShoreTel’s growing European channel consists of 95 partners, with Spain, Germany, and the UK being its primary markets and Horizon Solutions, Telindus, and Telba representative of its European partners. In 2005, ShoreTel introduced an incentive program under which channel partners can obtain higher discount levels by achieving high customer satisfaction scores in surveys conducted by ShoreTel, which are a key marketing tool for the company. ShoreTel had a less than 1% share of the enterprise telephony ports shipped in EMEA in 2007, according to Synergy Research Group, and a 1.9% market share of enterprise telephony ports shipped in the U.S. |
| Recommended Competitor Actions |
| Mitel - EC |
ShoreTel - EC |
• Competitors that have traditionally catered to large enterprise accounts should label Mitel’s 3300 ICP as a platform originally designed for SME/SMB customers and later modified to scale up. Therefore, the Mitel method of serving larger organizations with the 3300 is not elegant, cost effective or efficient.
• Unlike some of its competitors, Mitel is not a one-stop shop when it comes to voice-data convergence. Competitors that can offer end-to-end voice-data systems (e.g., 3Com, Alcatel-Lucent, Cisco and Nortel) should continue to look to bundle end to end solutions to create advantages over Mitel in solutions configuration, sourcing, pricing and service support.
• Mitel has aspirations of more firmly establishing its offerings within larger enterprise accounts, which includes multinationals. Competitors that are better established and more experienced in serving MNCs should quickly dismiss Mitel as lacking the expertise, a product line, footprint or channel capable of serving the sophisticated needs of MNCs..
• SME PBX vendors should continue expanding their carrier sales channels to counteract any moves that Mitel has been making to develop its own carrier sales channels. All Mitel rivals should also continue to establish new or leverage existing relationships with service providers and softswitch vendors as a means to expand sales of the IP end points and create additional revenue streams.
• Mitel competitors should characterize the company as more a follower than an innovator in several hot areas of technological development. For example, a host of competitors is much further along in dual-mode handset solutions, incorporating support for IBM products into their overall unified communications solutions offerings and integrating communications services into business processes.
• Competitors in Europe should expect Mitel to be perhaps stronger in the UK market, with the addition of Inter-Tel’s customer base and channel, but not in other European regions. |
• Alcatel-Lucent, Avaya, and Cisco – all of which are established in large enterprise markets and have set their sights on the SME market – should actively continue to develop technology that lets their communications systems operate in highly distributed environments.
• Rivals that are competing in European markets should keep watch on ShoreTel. The company has been quietly building its channel in the region and has been announcing new channel partners for Western European markets with increased frequency.
• Avaya, which has a competitive solution for distributed voice networks, should raise visibility for its Distributed Office system, which clearly targets the higher end of ShoreTel’s core markets.
• Competitors should be sure to protect their relationships with data networking vendors Juniper, Extreme, and Foundry to ensure that their joint sales, marketing, and development efforts are not superseded by ShoreTel’s arrangements with them.
• Vertical Communications and Mitel should stake out the small, low-end telephony system market by establishing rock-bottom prices and developing near-effortless installation and management for their products.
• NEC, NEC Philips, and 3Com – vendors traditionally associated with solutions for SMEs – should generate more publicity for their newer, larger-scale communications systems that can stack up to the latest version of ShoreTel telephony software targeting large enterprises.
• Competitors should draw attention to how late ShoreTel is in delivering new IP telephony features and products to the market, citing this as evidence that such a small company will struggle to meet the needs of its customers in a timely fashion. |
| Recommended End User/Customer Actions |
| Mitel - EC |
ShoreTel - EC |
• Legacy Inter-Tel customers and resellers should continue to seek guidance in which of the company’s voice systems will be actively developed and marketed on an ongoing basis. Some products, such as the Inter-Tel 7000 IP communications platform and Inter-Tel’s 5200 Series IP phones either have been phased out of the Mitel product portfolio or soon will be.
• U.S. and UK customers that are interested in Mitel’s communications systems and support services should inquire about certifications the company’s direct organization has to support third-party products. Alternatively, these customers should look to Mitel to pair them with qualified channel partners when necessary.
• Prospective customers should compare Mitel’s end-to-end product plans with those of their incumbent PBX supplier, evaluating scalability, networking, features, management, functionality and availability. Prospects should contact resellers that carry product lines from multiple vendors to assist in this regard.
• Customers interested in Mitel’s managed services and leasing programs should inquire about the scope of products covered under these offerings. While the programs now encompass both Mitel and Inter-Tel developed products, third-party applications (i.e., messaging, conferencing, contact center) are not included. As such alternative solutions and channel partner programs should be investigated.
• Prospective SME customers should investigate the numerous offerings, such as those from of Avaya, Aastra, Nortel, 3Com, Mitel, ShoreTel and others, before making a final choice on an IP telephony system.
• Service providers seeking CPE partnerships for SME-oriented managed IP telephony service offerings should include the Mitel systems and desktop endpoints in evaluations—if only to keep bigger-name suppliers honest. |
• SMEs with highly distributed networks should investigate IP telephony solutions from ShoreTel as a means to meet their communications requirements.
• SMEs considering a ShoreTel telephony system should also look into products from Aastra, Avaya, Alcatel-Lucent, Mitel, and Nortel. SMEs seeking an all-in-one solution in particular should investigate integrated communications platforms from these ShoreTel competitors.
• Potential ShoreTel customers need to determine whether local resellers have sufficient expertise and experience to install and perhaps provide ongoing services for their voice networks.
• ShoreTel customers should request a detailed R&D roadmap with concrete delivery dates to help ensure the company will meet their needs in a timely fashion.
• End users should demand a lower price on ShoreTel communication systems. When possible, end users should point out the lower system prices of rival developers to aid in negotiations. |
| Recommended Vendor Actions |
| Mitel - EC |
ShoreTel - EC |
• Mitel’s top priority lies in eliminating product overlap and facilitating interoperability between Mitel and Inter-Tel products that will co-exist in the combined portfolio. However an emphasis on cross-training sales staff and resellers in Mitel and Inter-Tel solutions will continue to be equally important to maintain revenue momentum as the company rationalizes its portfolio and transitions customers.
• The Mitel brand is not well known in the U.S. or in its second largest market - the UK - where the company wants to increase its market share in upcoming years. This is perhaps less of an issue with Mitel able to market its products in the U.S. under the auspices of the Inter-Tel corporate brand. Mitel should nonetheless work to increase awareness of its own brand to bolster confidence among enterprise buyers.
• The company should do more to educate the market on the scope of its direct sales and services programs. For example, third-party product support, consultancy offerings, and ICT services will be needed in order for Mitel to not only build out its market share in general, but to attract larger enterprise specifically.
• Mitel needs to raise awareness for its advanced communications applications, particularly for its developments in the areas of multimedia collaboration, conferencing and unified communications. The company has a very competitive portfolio leveraging Microsoft-based solutions, but also needs to branch out to offer IBM-based solutions as well in order to broaden its addressable markets and to keep pace with UC developments from its larger rivals. Mitel should also readily position its applications capability as clear differentiation against smaller rivals.
• Mitel should ensure that its top-tier channel partners aggressively market its telephony systems. With many of these partners also promoting a number of alternative products as well, Mitel should ensure it is not lost in the crowd. Identifying and recruiting a wide range of Mitel resellers of all stripes is tantamount to improving awareness for and sales of Mitel products globally.
• Mitel should bring jointly developed voice-data solutions to market by leveraging its partnerships with HP and Foundry, and with its MiSolutions program. Being a single source provider of more complete end-to-end solutions would help Mitel shorten its sales cycles and enable it to compete more evenly with the likes of Alcatel-Lucent, Nortel, 3Com and Cisco. |
• ShoreTel needs to raise its profile and its name recognition to gain credibility and sales in a market that includes well-known companies such as Avaya, Cisco, NEC, and Nortel in the U.S. and the likes of Aastra, Alcatel-Lucent, and Siemens in Europe. The company should continue campaigning to build its reputation as a supplier of PBX systems rated high in customer satisfaction; however, its needs to ensure its overall messaging also consistently encompasses other areas, such as price and flexibility.
• ShoreTel should continue driving home messages about its revenue and market share growth, as well as its overall corporate health. With a number of its competitors plagued by a variety of financial, legal, and ownership issues, the company has the opportunity to present itself as a comparatively healthy and more stable voice technology supplier.
• With version 8.1 of its PBX ShoreTel pledged its support for Microsoft Office Communications Server 2007. Yet the company has not publicized clear functionality differentiators that its OCS integrations enable for enterprises. ShoreTel will need to articulate the advantages of its approach if its ShoreTel PBXs are to be considered over alternatives as part of unified communications solutions being implemented by customers in the near term.
• ShoreTel should give more publicity to its young, but growing managed services programs. Managed services opportunities are vast as the market moves toward more increasingly sophisticated communications solutions, many of which involve the integration of business and communications software. As such, ShoreTel needs to do a better job of publicizing its integration and customization capabilities, as well as its qualifications to support third-party solutions components.
• ShoreTel needs to maintain the tight product development cycle it displayed over the past several years. Not only will this keep its products fresh, but it will also prove ShoreTel has the resources to compete.
• ShoreTel has been building out its offerings by incorporating third-party products to keep its portfolio competitive with the rapidly evolving solutions being made by ShoreTel rivals and their technology partners. However, these partner-provided solutions, as well as those produced by its Developer Network and technology Partner Program, should be more heavily promoted by the company. |
| Strengths |
| Mitel - EC |
ShoreTel - EC |
• Mitel has successfully carved out a market niche in the U.S. and the UK with under-200 seat organizations, which remains one of the largest enterprise telephony market segments globally.
• Mitel’s acquisition of Inter-Tel expanded the company’s role in the SME market segment. The move particularly benefited Mitel in the U.S. where Inter-Tel maintained a sizable base of enterprise customers, as well as a channel that is now a conduit for Mitel products and services. Further, the Inter-Tel acquisition expanded Mitel’s portfolio of products and brought to Mitel a successful managed services program that has been adopted by the company for all of its products
• Mitel moved aggressively in integrating Inter-Tel’s business operations. The company has rationalized some of the Inter-Tel product line, most notable the Inter-Tel 7000 platform). Some Inter-Tel-developed applications can now work with Mitel telephony systems, while Mitel-developed end stations operate with Inter-Tel-developed voice platforms. There is a combined reseller program, and the company’s Managed Services program now covers both Mitel and Inter-Tel products.
• Mitel has done a respectable job in building out its global channel network with well-known top tier players. Its partners include BT, Verizon, Allstream, Rogers, Bell Canada, IBM, Westcon, Ingram Micro, TechData, Crane and others, greatly improves Mitel’s sales footprint, provides an advantage over smaller rivals and enables it to better compete with larger, more resource rich competitors.
• Mitel has provided its legacy PBX customers with a coherent migration path to IP telephony that retains the core value of its original PBX system and gives customers the necessary confidence to follow the company's strategy of moving toward voice/data convergence.
• Mitel’s partner ecosystem has been pivotal in keeping the company’s portfolio competitive. The benefits of Mitel’s partnership with Microsoft for UC and other applications development are well documented. Also critical however are partnerships with Foundry Networks and Hewlett-Packard’s ProCurve Networking, and more recently Sun Microsystems, which have helped drive the convergence of data on Mitel’s otherwise voice-centric products. |
• Public disclosure of ShoreTel’s financial position, due to its IPO in the summer of 2007, provides a window into a profitable company with product revenues that have consistently increased over recent years. This level of financial detail from a company that was recently privately held should help dispel some of the concerns customers and partners may have had about its long-term viability.
• ShoreTel’s focus on the development and marketing of a single pure IP telephony system is of real benefit to the small company with its resources limited in comparison to its much larger competitors. With no legacy technology or customer base to maintain, ShoreTel has a development advantage over rivals with TDM product lines and customers that need catering to while still trying to move forward with newer IP communications systems development.
• ShoreTel’s distributed call control architecture gives the company a clear differentiator in the crowded IP PBX market. The company has done a commendable job in gaining market traction by selectively expanding its channel network in a way that allows partners to differentiate their portfolios rather than saturating the market with ShoreTel products. Appeal for ShoreTel products both in the channel and among enterprises may be further improved via a new managed service program that makes affordable payment options available to customers.
• While the ShoreTel Small Business Edition PBX brought a bit more diversity to the company’s voice platform portfolio, a steady R&D pace and increasing its development expenditure yearly have kept its flagship PBX competitive. Updates to its contact center, monitoring, management, and third-party software integration capability, as well as an expanded line of ShoreGear switches and endpoints, have provided new options for customers and resellers.
• ShoreTel’s still-young partner program makes available solutions that would not be possible through its internal development resources. ShoreTel already announced partnerships to deliver a wider range of gateways, enable partitioning services, and expand its wireless solutions – all of which allow ShoreTel and its resellers to tap new markets. More recently the company has built out its applications capability with third-party FMC, contact center, video and other solutions. |
| Weaknesses |
| Mitel - EC |
ShoreTel - EC |
• The process of combining Mitel and Inter-Tel has moved rapidly from an organizational standpoint. However, integrating what are today two separate portfolios into a single cohesive catalog will be a long-term process. It will require considerable R&D and financial resources. In addition, both Mitel and Inter-Tel’s international operations focused largely in the UK and were limited elsewhere in Europe. As such, the merger of the two companies has not significantly expanded the combined company’s international operations.
• In November 2008 Mitel announced a number of initiatives to help lower its operational expenses and improve sales opportunities in a down global economy. The company has claimed profitability in several recent quarters, but it carries debt of over $430 million. Taken together these circumstances may shake the confidence of Mitel’s partners and customers.
• Despite its years of activity in the enterprise telephony market, Mitel suffers greatly from comparatively low brand awareness, particularly outside its native Canada. This not only adversely affects its standing in its traditional SME markets, but also in the enterprise communications markets targeted by the company. Decisions by executive management not to advertise the company aggressively promise that this situation will not change soon.
• Mitel now draws a substantial portion of its revenues in the UK and US from direct sales and services. However, the company does not promote third-party product support as part of its services offerings. The company also does little to publicize the ability of its services organization to consult businesses on integration of IT and communications software or for its ability to directly perform these integrations.
• Though not an uncommon occurrence, the majority of Mitel’s channel partners have relationships with multiple Mitel competitors. Many of these own larger shares of the world’s PBX markets (i.e., Nortel and Avaya in the U.S., and Siemens Enterprise Communications, Aastra and Alcatel-Lucent in Europe) that offer easier and faster sales for channel partners leveraging the incumbent supplier as an entry to upgrade and up sell opportunities.
• Mitel has no portfolio of data networking systems and as such could find it difficult to meet its customers’ end-to-end converged communications needs. The company’ partnerships with data networking systems vendors have had a tendency to change, with HP ProCurve and Foundry replacing a previous relationship with Extreme. |
• ShoreTel suffers from a lack of name recognition, but less so then it has in the past. This is especially problematic outside North America, but also in a U.S. market chock-full of big-name PBX players (e.g., Avaya, Cisco, NEC, and Nortel) and a long line of other small suppliers seeking to establish themselves.
• ShoreTel lags behind competitors (e.g., Aastra, Alcatel-Lucent, Nortel, NEC, Avaya, Cisco, Siemens, and Mitel) that have established relationships with carriers that resell telephony systems as a means to create long-term services relationships with customers. While these competitors have established ways to create revenue opportunities for their partners, ShoreTel is further behind in making a play in this area.
• Producing and maintaining a single core PBX platform can be a mixed blessing for ShoreTel. Despite ShoreTel Enterprise Edition’s scalability, the company may struggle to consistently attract large enterprise customers using a platform that was originally designed for, and is more commonly deployed by, SMBs. In addition, ShoreTel is at a disadvantage in bids for large centralized deployments against rival solutions that utilize far fewer networked servers.
• The company was comparatively late in delivering on SIP support and media encryption, and despite recent enhancements, it trails a number of competitors in the area of presence-based rich media communications software, as well as in wireless solutions. This raises concerns that a company the size of ShoreTel may not be able to respond to changing customer demands in short order – despite the advantage of not being preoccupied with maintaining legacy TDM systems.
• ShoreTel’s overall portfolio, though growing, remains much smaller and less diverse than those from many of its rivals delivering telephony systems and applications geared specifically to a wider range of markets. The company also maintains no data portfolio of its own, putting it at a disadvantage to rivals when vying for customers seeking single-source solutions or bundled offerings. |
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