Mitel Goes Big

Ottawa network vendor aims for the enterprise You know the legend of the Trojan Horse: having spent a decade vainly laying siege to the city of Troy, the Greek army devised this wooden equus and left it on Troy’s doorstep. Thinking it a gift, the people of Troy towed the horse inside the city walls. Once in, the horse’s contents – Greek soldiers – slipped out and unlocked the city’s gates. So entered the Greek army. So fell Troy. These days, "Trojan Horse" commonly describes an unwanted application that infiltrates computers and makes them vulnerable to hackers. But network gear maker Mitel Networks Corp. uses the phrase in a more positive way, to describe a business strategy: do a small installation for a client first – perhaps a new phone system at a branch office – and ramp up to a cross-enterprise installation over time. "For a lot of customers, we’ve gone in and solved a particular point problem, and we slowly built out the Mitel equipment as time went on," says Asif Rehman, solutions marketing manager. Thus Mitel has earned respect. Its products garner kudos from industry observers and customers. But is it enough? Mitel’s strategy is successful among small- and mid-sized businesses (SMBs), but it has yet to make a substantial dent in the enterprise market, where vendors make the big bucks. These days the firm is touting its enterprise prospects, and execs say Mitel is advancing here. It has won business from financial services biggies like American Family Insurance in Wisconsin, and Goldman Sachs in London, England, Rehman says. But this is only the beginning. Mitel wants more of the enterprise market pie. "You can understand why the move is being made," says Ronald Gruia, an industry analyst at Frost & Sullivan in Toronto. "They want to increase their addressable market," especially since main competitors Avaya Inc., Cisco Systems Inc. and Nortel Networks have sussed out the SMBs. Mitel must not only defend its SMB turf, but also forge into new territories like the enterprise arena. The firm has its challenges. Let’s consider them, and Mitel’s plans to address them. What follows might help your business decide if it should consider this vendor. Objects May Be Bigger Than They AppearMitel has an optics problem – this notion that its wares address SMBs only, that the firm is less of a Trojan Horse and more of a Trojan Pony. "One certainly doesn’t think of Mitel as being in the same league as Avaya, Nortel and Cisco," says Brent Kelly, a technology analyst at Wainhouse Research in Hyde Park, Utah. "It isn’t one of the top three or four vendors a large enterprise would look to." But Mitel is working hard to improve its reputation. Witness the upcoming Version 7.0 release of the established 3300 Integrated Communications Platform (ICP), an IP-PBX. Due to hit the streets in April, "there are a lot of things coming out…that are applicable to the large enterprise," Rehman says. For the Enterprise:Size: The 3300 supports up to 65,000 registered users, assuming multiple 3300s are used and centrally managed via Enterprise Manager, Mitel’s management software. Individually the 3300 supports 1,400 active users today but "there are plans to scale up," Rehman says. "We’re going to go with the industry trend of building more standard hardware, and that will increase the number of users you can put on a single controller." Stephen Beamish, Mitel’s solutions marketing director, says the box will reach 5,000 active users down the road. Network management: Enterprise manager, in conjunction with Version 7.0, lets network administrators create office profiles for quick site deployment. If you want to install a new branch office, simply apply the "branch office" profile to the new site via the master-3300’s profile manager. Call centre management: Thanks to the 3300’s advancements, Mitel’s accompanying 6100 Contact Center Solutions (e.g., ACD, management tools and agent applications) will scale up to support more operators and distributed situations. Investment protection: Mitel takes the modular approach. Let’s say a business decides to bring Gigabit Ethernet to the desktop, but it doesn’t want to throw out its current Mitel handsets. Mitel’s answer: "take the stand off the back of the existing phone, plug in our Gigabit Ethernet stand, and your existing IP phones are now Gigabit IP phones," Rehman says. The savings? Substantial. Gigabit phones cost as much as $950, he says. Mitel’s Gig-E stand is $250. Flexible end points: Mitel will offer a Wi-Fi base for its IP phones, so handsets that lack access to convergence-ready wires will still reach the network. Admins might even turn the phones into discreet access points – wireless nodes that other devices nearby can use for network connectivity. Mitel has a history of innovative end points. The 5320 IP phone provides a docking port for PDA data synchronization. The Navigator is a sort of communication dashboard that turns the phone into something of a computer-screen module, which spells more room on the desktop for documents and paperclips. But gadgets are one thing. Enterprise clout is a different kettle of fish. Some wonder if Mitel can bring enough heat to get it boiling. A Show of Hands, PleaseAsk anyone even vaguely connected to the tech world: Who is Cisco? They know. Now, who is Mitel? A few blank stares. Welcome to Mitel’s situation: innovative, but not as well-known as its competitors, and seeking acknowledgement for its accomplishments. Satisfaction will not come easily. "How are they going to get the mind share of these big global firms when they’re competing against the Avayas, Ciscos and Nortels, which have a lot more money?" notes Kelly from Wainhouse Research. Rehman says the answer lies in a strategy different from the Trojan Horse: the alternate "gateway" tactic. Unlike the Trojan Horse, this is no sneak attack. Gateway is all about confrontations: Mitel competing head-to-head against the big three for RFPs. You might say gateway opens doors that the Trojan Horse doesn’t: Rehman notes that many of Mitel’s latest enterprise contracts are the result of the gateway plan. We interviewed one such client, who requested anonymity. The firm, with more than 20,000 employees in North America, Europe and Australia, doesn’t want to give its adversaries any ideas. "We’re using Mitel in ways we believe will be an advantage compared to our competitors," says our source, noting that his company plans to use the new 3300s, Mitel IP phones, softphones and collaboration programs to improve call routing in the contact centre and, in turn, provide better customer service. The firm chose Mitel after testing eight phone systems, considering ease of installation and end-user comments, among other criteria. Mitel’s equipment won. "Active Directory Integration was easy. We struggled with some of the other companies’ products, and I have really good Windows technicians. Set up of the 3300 was painless." This client was concerned that Mitel didn’t have the expertise to satisfy so large an enterprise. But the vendor’s bigwigs, chairman Terry Matthews and CEO Don Smith, came to the customer’s office to chat. "We had a great discussion about strategy, direction, and why Mitel made sense," the source says. "And we saw that – both in the quality of the product, our experience during the pilot, and the openness with which Mitel dealt with us." This is the gateway strategy at work. "It’s the relationship we have with them," Rehman says. "It’s not a decision made necessarily on technology, but on what we’re willing to do with those customers to meet their needs." Flexibility is one of Mitel’s assets, and it informs the 3300. It scales from 30 to 65 users in CX flavour all the way up to thousands of users in LX form (clustering assumed). Between those extremes sits the mid-sized MX version, which Mitel means to enhance with release 7.0. "We’re collapsing the MX and LX together," Rehman says. The result will be known as the MXE – "E" for "extendable." It will serve growing companies that need room for, say, a few hundred users today but a few thousand in short order. The FutureMitel seems to making the right moves. It’s focusing on product flexibility and investment protection. It’s partnering with other tech vendors to fill the gaps in its portfolio: Microsoft Corp. for collaboration functions, Foundry Networks Inc. and Hewlett-Packard Co. for data networking. By most assessments the firm spends a bundle on research and development, which suggests innovation will continue to flow. And it might be the right time for Mitel to tackle big companies. Industry observers note that PBX refresh cycles are shorter now than they used to be, and prospective customers might consider new suppliers. But challenges persist. Competitors moving into the SMB space pressure Mitel to move up as well as defend. And although Mitel’s reps say the company is financially sound, it’s often described as a potential acquisition for some ambitious outsider, bringing its future into question. Nonetheless, Rehman says SMB success and enterprise success are not mutually exclusive. "For various reasons the focus has been on our success in small business. We think the solutions we have and the opportunities that exist – there’s a lot of potential for us."

Mitel Goes Big

News | 03/01/2006 5:00 am EST

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