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Mitel/Avaya: Contact Center Implications

I woke this morning to news of a Bloomberg report that Mitel has made Avaya an offer to create a combined company worth more than $5 billion (see related No Jitter post). One of my first thoughts was about what this could mean to cloud contact center player Talkdesk.
I understand if that’s not where most readers’ minds would go. I’ve been following the contact center market for nearly 30 years and it’s the lens through which I put most enterprise communications news. Let me lay out the reasoning that makes this, at least partially, a Talkdesk story.
In the past year or so, Mitel and Avaya have publicly reported staggering numbers of contact center agent seats — one million in the case of Mitel, five and a half million for Avaya. That’s nearly one-half of the approximately 13 million agent seats that remain on premises.
Mitel, Avaya contact center stats
Both Avaya and Mitel have had limited traction moving predominantly premises-based customers to a modern cloud contact center solution. Avaya has had some success with private cloud solutions, most recently with OneCloud ReadyNow. Mitel’s recent forays into cloud contact center have included re-packaging a ShoreTel offering as MiVoice Connect Contact Center and an OEM agreement with Serenova for customers looking for stand-alone multitenant cloud contact center functionality.
Mitel made a bold contact center move in April, announcing that it would partner with Talkdesk not only to replace the existing Serenova OEM but to begin selling Talkdesk to existing customers running on-prem unified communications. Co-selling efforts began immediately, and the two companies announced plans to integrate Talkdesk with the Mitel UCaaS platform by the end of this year.
I wrote about the Mitel-Talkdesk partnership in the post, “Mitel & Talkdesk: Next Big Thing in UCaaS/CCaaS?” My title seems prescient now. At the time, director of contact center solutions at Mitel, Matthew Clare, told me, “The goal is to offer our customers absolutely everything that Talkdesk has in their toolkit.” In the intervening four months, two Talkdesk product announcements become relevant in the context of Avaya/Mitel merger discussions. They are:
  • Hybrid Spaces — In early June, No Jitter’s Beth Schultz described this offering as giving “contact center customers the ability to operate on Talkdesk’s cloud platform — benefitting from the processing and performance that comes with running in a public cloud — while meeting security, privacy, and compliance requirements by storing customer data in a private cloud.”
  • Talkdesk Boost — Later in June, No Jitter blogger Zeus Kerravala, of ZK Research, described this as a hybrid architecture meant to enable businesses to modernize their contact centers by layering a number of AI-driven contact center applications on top of a legacy ACD.
What I see in both of these products, as well as in Talkdesk’s decision to build a workforce management solution, is a company preparing to win over larger and larger premises-based customers. The Hybrid Spaces and Boost solutions cater to the portion of the market Talkdesk understands won’t embrace the complete replacement route taken by small and medium-sized customers.
The perceived importance of a strong CCaaS offer to success in the UCaaS market has been evident in the recent moves by RingCentral and 8x8 to strengthen their CCaaS portfolios (often through acquisition) and executive teams. Multiple CCaaS vendors (Genesys, NICE inContact, and Five9 to name just a few) have had success selling into the Avaya contact center customer base for several years. They could face a new level of competition should Avaya/Mitel become a reality.
And while some might think that the contact center expertise Avaya would bring to the proposed merger would negate Mitel’s need for the Talkdesk partnership. I disagree. I think that Mitel made a thoughtful decision to choose a modern, microservices-based development partner in Talkdesk and that that would become the go-forward CCaaS offer for an Avaya/Mitel entity.