The acquisition of Polycom by Mitel is the biggest news to hit our industry since Cisco bought Acano last year. There have been plenty of articles about the financial, investment and corporate structure pieces of this announcement. However, as always, I am focused on the user experience. With that in mind I would like to take a few minutes to look at the companies’ offerings in the space and consider how they may combine into a new UC portfolio.
While Mitel has a pretty broad selection of offerings, I generally think of them as a UC and Contact Center player with a deep SMB customer base. On the hardware side they have phones and headsets, but they lead with the software/platform side. UC related offerings include:
This is just a sampling of their UC portfolio, but it is clear they have offerings suited for various customers and use cases. All in all, Mitel has a very strong portfolio of UC servers for both enterprise and SMB.
Polycom’s strength has always been hardware and endpoints. It is no secret that they have cloud/UC platforms, developed in recent years in reaction to the big software revolution. However, they have struggled to put it all together into a cohesive portfolio. Their cloud messaging has been a bit confusing and muddled as their first cloud-ish offering, CloudAXIS, was rebranded as Web Suite, remaining within the various products and platforms using the RealPresence moniker.
The result has been a bit of market confusion. For example, I have had some trouble explaining how the new Clariti offering (a “cloud burst” service which can be installed on-prem??) fits into their cloud strategy. Is Clariti a virtualized version of their RMX infrastructure? If so, why not simply say so rather than use this cloud burst language? Is RealPresence Web Suite simply the name for the VMR hosted by Clariti, or is it something else altogether? Is RealPresence Cloud simply a Clariti powered service? If so, why does it exist as separate marketing concept? It seems like Polycom has all of the elements needed for a cloud play, but could use a little clarity (sorry) in its messaging.
Details aside, they simply aren’t seen as a UC player. In some ways this has worked to their advantage, as their IP phones have been seen as neutral, allowing them to sell into any UC environment. In addition their UC independence has allowed them to develop a deep and strong relationship with Microsoft. However, it remained a gap or weakness in their portfolio as their traditional video competitors, including Cisco and Lifesize, have managed to make more direct (although in some cases painful) pivots from hardware to UC and cloud.
Where Polycom has always remained strong is in its hardware. Its room video systems as well as conference and desktop phones have always been popular with critics and customers. Their classic starfish speakerphone is an iconic business meeting room element. I was fortunate enough to be invited to their headquarters last year for the big reveal of three new hardware products. The Centro is clearly a showpiece for high profile customers, but the Debut and Trio are incredibly well suited not only for Polycom’s existing base of enterprise customers, but for the SMB market as well.
Putting It All Together
This is where the synergies (and slight overlap) start to reveal themselves. On the market side, Mitel has nowhere near the enterprise channel depth enjoyed by Polycom. As Polycom hardware endpoints become integrated with Mitel’s UC platforms, those platforms will be more and more attractive to Polycom’s existing customer base. Mitel’s UC play is enterprise ready, but somewhat light on the video support. As RealPresence is integrated into Mitel they will have true enterprise UC platforms with leading video.
On the flip side, Mitel has deep inroads to the SMB market, but lacks notable video endpoints. We are finally at the tipping point for video communications in SMB. It has long been an enterprise only technology, but it is now affordable enough, and easy enough to manage for the SMB market. This acquisition not only saves Mitel the trouble of developing their own video technology, it instantly allows them to sell one of the most respected and leading video brands. The Polycom Trio or Debut, bundled with the Mitel UC platforms will be a powerful combination.
There is some product overlap. Both companies make IP desktop phones. For the most part, Polycom is expected to run as a somewhat independent, but integrated, division of Mitel. However, I wouldn’t be surprised if the desktop phone divisions somehow found themselves combined. While both brands are well respected and have good market presence, my feeling is the Polycom brand is a bit stronger here. So Mitel IP phones may go away.
The Microsoft Question
One big question is how this will affect Polycom’s relationship with the powers that be in Redmond. One of Polycom’s biggest assets has been its BFF status with Microsoft. As a non-UC platform player, their UC ready, and independent, endpoints have enjoyed leading compatibility with Skype for Business. However, Microsoft does not have a history of playing nicely with other UC providers. The Polycom folks say that of course they spoke at length with Microsoft about this acquisition, and there is no need for concern. They say that Microsoft sees a little UC competition on the Mitel side as not significant enough to disrupt their longstanding relationship with Polycom. Still, I would bet anything that the remaining independent, Skype-ready, endpoint vendors are courting Microsoft pretty hard right now. We will have to watch this closely to as it develops.
All in all, after reviewing the product portfolios and examining the market positions closely, this acquisition makes more and more sense to me. On the one hand we have a strong UC platform with a relatively weak video play. On the other hand we have a leader in video technology with a muddled cloud/UC message. Also, we have one company with a legendary enterprise channel and new SMB ready products, and another company with great SMB presence and an enterprise ready UC platform. Other than a little overlap with the desktop phones, I think this may be a perfect fit.