Mitel acquires ShoreTel to cement foothold in UCaaS

Mitel's acquisition of ShoreTel expands UCaaS portfolio and doubles down on cloud-based offerings

Tags: Mergers and acquisitionsMitel Networks Limited
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Mitel acquires ShoreTel to cement foothold in UCaaS McBee has been aggressive in his acquisition strategy in a bid to create a larger footprint in the UC-as-a-service market.
By  Manda Banda Published  July 31, 2017

No IT sector has escaped the digital transformation, and unified communications (UC) is no exception. To compete with born-in-the-cloud providers, traditional on-premise vendors are looking for fast routes to larger market share. Such is likely the case with Mitel's decision last week to buy ShoreTel for $430m.

In recent years, Mitel has doubled down on its cloud-based MiCloud communications services, but the company has a limited channel presence.

Mitel CEO Rich McBee has been aggressive in his acquisition strategy in a bid to create a larger footprint in the UC-as-a-service market.

In March of this year, Mitel divested its mobile division and merged its cloud and enterprise-service divisions. And earlier this month, the company completed the acquisition of Toshiba's UC business.

But the acquisition is more than just a consolidation play. The two companies have large presences in different verticals and geographies, and the overlap within their channels is minimal. ShoreTel also brings Mitel a strong communications platform-as-a-service offering, allowing partners and customers to build applications on a strong API platform. The two companies when combined will have 3200 channel partners and 4200 employees worldwide.

"This is a very natural combination that enables us to continue to consolidate the industry and take advantage of cost synergy opportunities while adding new technologies and significant cloud growth to our business," Mitel CEO Rich McBee said in a statement.

The acquisition makes Mitel the number two player in the UCaaS market behind giant RingCentral, according to data from Synergy Research, and it's been in the works for at least the last three years.

According to Synergy, the overall UCaaS market hovered around the $4bn mark as of January of last year, but only a third of that figure went to enterprise business suites such as that offered by ShoreTel and Mitel. The remaining two-thirds revenue was allocated to stand-alone applications such as video conferencing.

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