Brian Riggs
Brian is a member of Ovum's Enterprise team, tracking emerging trends, technologies, and market dynamics in the unified communications and...
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Brian Riggs | July 17, 2012 |


Video and Virtualization Key Topics at Mitel Partner Conference

Video and Virtualization Key Topics at Mitel Partner Conference A new hardware device for conferencing, and a continued push for its VMWare partnership

A new hardware device for conferencing, and a continued push for its VMWare partnership

Mitel held its annual partner conference last month and, as usual, was kind enough to invite some industry analysts along. As Eric noted, at the event Mitel was very bullish about its recent performance and its prospects for the next year--remarkably bullish considering the much more subdued note the company struck at last year's event. Rich McBee pointed to quarter-over-quarter and year-over-year growth as evidence of Mitel's financial health, changes to the regional directors and area directors as helping to reinvigorating sales efforts, and a portfolio of premise- and cloud-based communications products based on the same software stream, thus showcasing the flexibility of Mitel solutions.

Mitel's financials are certainly more promising compared with last year's, which is good for the company and rightfully encouraging to its partners and customers. But looking at charts showing revenues, gross margins, net income and other key metrics I'm seeing a lot of zigzaggy lines going back and forth between positive and negative. Hopefully, Mitel chiefs have struck upon a business strategy that will straighten out the zigzags and end the company's rather wild financial ride of late.

The big news at the conference was Mitel's unexpected entry into the market for video conferencing end points. Dave Michels has already provided some details about it, adding some further notes here. Putting the Mitel move into context, the company's entry into the video conferencing market is unlike Avaya and Cisco, which bought companies with entire portfolios that can compete head-to-head against Polycom. And it's unlike Siemens Enterprise and Aastra's recent video conferencing announcements, which center on desktop devices and soft clients. Instead Mitel is selling a device for conference rooms requiring video connectivity between four parties (to be expanded to eight in a subsequent release).

The company hopes that the fact it's targeting the lowest possible end of the room-based video conferencing market will allow it to fly under the radar of Polycom, LifeSize, Magor, and other partners it still relies on to provide its customers with a much more comprehensive line of video conferencing solutions. One thing about the new Mitel device--called UC 360--that fascinated me is that there's two versions of the product, one that's audio only and another that provides the full video conferencing experience. At present they're separate devices with separate SKUs. But a future version of the product is expected to be upgradeable from one to the other. So a customer could deploy Mitel UC 360 configured only for audio conferencing as an alternative to a Polycom SoundPoint, Cisco Unified IP Conference Station, or Avaya's Konftel devices. (Assuming Mitel can bring down the price of UC 360 so it's competitive--conferencing devices generally cost $250-$300 street, which I think is considerably less than the audio-only version of the Mitel unit will cost.) Then the same customer could upgrade UC 360 to support video as well--something the Polycom and other devices are in no way capable of. It would be a differentiator for Mitel, if the company delivers the next-gen UC 360 as described.

Finally, virtualization. It's hard to have a conversation about Mitel without touching on the subject of virtualization. The company's track record in this area is impressive. Mitel worked directly with VMware to make its real-time business communications software deployable in a virtualized server environment. This paved the way for its rivals to quickly follow suit. Mitel developed a single communications software stream that allows Mitel Communications Director (MCD) to be deployed on Mitel hardware (Mitel 3300); on industry standard-servers using virtualization (virtual MCD); as multiple virtual instances on a single server (Multi-Instance Communications Director (MICD) for large enterprise or service provider use; as company-owned software on a virtual machine in a private cloud (Mitel AnyWare IaaS); as a hosted service as a vitual machine in a public cloud (Mitel AnyWare).

Nearly every executive at the Business Partner Conference mentioned virtualization at some point in their presentations. Ron Wellard, heading up the Mitel Communications Solutions division, said "We are not going to develop our own high-availability solutions internally. We are going to rely on VMware for that."

Philip Keenan, head of North America sales, identified virtualization and the Mitel 5000 as "killer products" in the company's 2012 fiscal year, continuing on to say Mitel has set up a "virtualization sales team" that takes a consultative approach in positioning Mitel products when deployed with server virtualization.

Jon Brinton, general manager of Mitel's Network Services Group, noted that about 150 of Mitel's 450 resellers in North America are now actively selling Mitel solutions deployed with server virtualization. (Separately, Keenan said that it was Mitel's goal to certify 35% of its channel on server virtualization. 150 is just over of 450, so apparently Keenan's goal has been achieved and Mitel is now in the process of bumping the number up higher.)

Interestingly, CTO Jim Davies said, "We rarely sell virtualization." Rather, customers have typically deployed server virtualization already and Mitel partners just need to convince them to extend it to their communications systems and software, he said. This corresponds to a documented rise in adoption of server virtualization among SMBs--SMBs still being Mitel’s primary customer.

Davies also criticized Cisco's response to virtualization as only supporting its virtualized instances of its UC software on Cisco UCS server hardware rather than any industry-standard servers. He noted that ShoreTel cannot completely virtualize its UC software due to the distributed nature of the ShoreTel solution. But I can't say I'm entirely onboard with these statements. ShoreTel can virtualize all of its software with the exception of call control, which due to the ShoreTel architecture necessarily resides on hardware distributed throughout the network. As for Cisco, Unified Communications Manager can be deployed as a virtual machine on other server hardware besides UCS, but "all VMware software must be customer-provided." So the restriction is more around procurement than anything else.

When it comes to the subject of restrictions, in a sense Mitel is as guilty as many of its competitors. The company is so closely aligned with VMware that it has failed to qualify its communications software on other vendors' hypervisors. Avaya has proven that Citrix XenServer can serve as the hypervisor for real-time communications software deployed in a virtualized environment. Alcatel-Lucent has demonstrated the same with Red Hat KVM, which its OpenTouch software runs on when deployed in a virtualized environment.

To be fair, other vendors are as restrictive as Mitel when it comes to the type of hypervisors used with their UC software, with Mitel and Cisco supporting only VMware, Avaya only Citrix, and Alcatel-Lucent only KVM. Oddly enough, Microsoft--the only UC vendor selling a hypervisor of its own--is much more inclusive, with Lync Server 2010 able to be deployed on VMware vSphere, Citrix XenServer, and Microsoft Hyper-V. This kind of support for multiple hypervisors should be on the product roadmap of all UC software being sold today. Customers should have as much choice in hypervisor as they do with the server hardware on which their UC software is deployed.

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