SHARE



ABOUT THE AUTHOR


Michael Finneran
Michael F. Finneran, is President of dBrn Associates, Inc., a full service advisory firm specializing in wireless and mobility; services...
Read Full Bio >>
SHARE



Michael Finneran | March 02, 2015 |

 
   

Mitel Buys Mavenir: the 'Why' to Be Determined

Mitel Buys Mavenir: the 'Why' to Be Determined With zero customer overlap and no apparent synergy, this one has many industry watchers scratching their heads.

With zero customer overlap and no apparent synergy, this one has many industry watchers scratching their heads.

Mitel announced this morning that it has entered a definitive agreement to acquire Mavenir Systems, a provider of software-based networking solutions for mobile carriers, for the equivalent of $560 million in a combination of cash and Mitel stock.

Mavenir's product line includes software for voice over LTE and voice over Wi-Fi (VoWi-Fi), IP Multimedia Subsystem, and rich communication services (RCS). After the transaction closes sometime in mid 2015, Mavenir stockholders will own approximately 16% of Mitel. Mavenir racked up a $24.8 million loss in its most recent fiscal year (up from $15.3 million in 2013) on sales of $129, and increase of 31.4% over 2013.

portable In an early morning analyst's call, the bulk of the questions aimed at determining what type of synergies might be created; the answers were not very enlightening. Mitel sells telephony and UC solutions to enterprise customers, and Mavenir sells software to mobile operators. Mitel CEO Rich McBee alluded to potential R&D synergies somewhere down the road, and Mavenir CEO Pardeep Kohli raised the possibility that its session border controller, for mobile operators, might now find a market with enterprise customers as well.

The executives rattled off many important buzzwords, including mobility, cloud, LTE, IP, virtualization, BYOD, and even SDN. However, lacking was anything approaching a meaningful vision.

They estimated that the combined overhead would save the company $20 million per year, and McBee hinted that Mitel's IP expertise would be valuable to Mavenir's LTE initiatives. In response to a question from consultant Sheila McGee-Smith, a fellow No Jitter blogger, McBee said: "What I look forward to is getting our engineering teams together ... and let them innovate away." I didn't find this a confidence builder.

With last year's Aastra acquisition, Mitel clearly selected a company in its product space with little in the way of customer overlap. While Mitel and Mavenir have zero customer overlap, they don't seem to have any recognizable synergy either -- at least certainly not in the near term. The mobile operators' obsession with the consumer rather than the enterprise market doesn't offer a lot of hope.

One potential synergy (though not mentioned on the conference call) is the new VoWi-Fi product Mavenir is targeting at cable operators. The VoWi-Fi capability in the iPhone 6 (currently supported only by T-Mobile) and the introduction of Cablevision's VoWi-Fi Freewheel service has put the idea of VoWi-Fi back on the radar screen, and other cable operators are apparently considering similar offerings. Mitel does have an enterprise VoWi-Fi capability in its product line.

Another potential would be something that integrates Mitel's UC&C capabilities with RCS, a GSM Association initiative, marketed under the name "joyn," that would allow mobile operators to offer enhanced services in their networks. Potential RCS capabilities include presence, chat, emoticons, location share, file sharing, and video sharing (see what I see). Unfortunately, most of those capabilities already exist in over-the-top services. And, as reported in the Wall Street Journal, the tension between mobile operators and Internet companies is on display this week at Mobile World Congress in Barcelona, where Facebook CEO Mark Zuckerberg participated in a keynote discussion today. In the U.S., only Metro PCS (now T-Mobile) has introduced anything with regard to RCS.

While it's nice to see Mitel stretching its muscles, this buy might be sending the company to the chiropractor -- the stock was down by as much as 16% by mid morning. By its own admission, Mitel is focusing on growth rather than synergy, but it appears that is not a message that resonates with the market. McBee is trading away 16% of the company for a position in an adjacent market serving the mobile operators. It would be interesting know what else he sees here.

Follow Michael Finneran on Twitter and Google+!

@dBrnWireless

Michael Finneran on Google+





COMMENTS



Enterprise Connect Orlando 2018
March 12-15 | Orlando, FL

Connect with the Entire Enterprise Communications & Collaboration Ecosystem


Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

December 13, 2017

The two major vendors in the Unified Communications space, Cisco and Microsoft, are both strongly promoting their cloud UC deployments. If cloud UC is on your enterprises roadmap, but you dont want

November 29, 2017

As video conferencing use rises in the enterprise, businesses are looking for ways to bring this technology out of traditional conference room and make it more broadly accessible. That's made the h

November 1, 2017

Your customers (internal and external) demand that you offer them the ability to connect by any means. With the adoption of cloud communications tools you now have access to an expanded portfolio o

November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.