Why a Mitel Avaya Merger Would Improve the Unified Communications-as-a-Service Market

Merger of cloud communications companies Mitel and Avaya

It is getting harder to get things wrong in the unified communications field. Before the advent of cloud technology and the disappearance of communications infrastructure into the ether of someone else’s servers, you had to take a running leap at your future requirements and invest without really knowing what capacity you’d ultimately need.

Now the guessing games are over and we are free to scale up and down our communications needs as an ongoing cost. Unified Communications as a Service (UCaaS) has made total enterprise continuity a reality even for the small business community.

And things could get better.

The proposed Mitel Avaya merger would bring together two of the leading UCaaS players, potentially creating a new hybrid with the clout to rival clear industry heavyweights Cisco and Microsoft. Further than that, it would bring together UCaaS strategies that target either end of the business world with efficiencies generally poles apart. The buy-out is merely a rumor, but it would appear to be good news for small-to-medium businesses looking to communicate with across-the-organization efficiency.

Mitel Continues to Grow

The rumored $2.2 billion all-stock merger is the latest in a series of rapid expansion attempts and successes Mitel has launched over recent years. In 2016, the Canadian telecommunications company attempted to acquire video conferencing vendor Polycom–an attempt that ultimately failed and led to the video supplier’s merger with Plantronics.Graphic describing UCaaS

That failure was followed by the $530 million acquisition of ShoreTel in 2017, a like-for-like merger that saw Mitel become one of the largest UCaaS companies in the market.

This year’s target, Avaya, is not as straightforward a fit as ShoreTel. Avaya has more traditional roots in on-premises deployments of both hardware and software UC solutions. At the time of filing Chapter 11 bankruptcy in 2016, its leaders stated a move to becoming a cloud solutions provider was central to its recovery.

In a way, the merger would capture a broader industry evolution in a single exchange.

It appears that task will now fall to Mitel, which would seek to expand from its small-to-medium business focus and take advantage of Avaya’s large enterprise legacy of hardware solutions.

In a way, the merger would capture a broader industry evolution in a single exchange: the smaller, more nimble cloud service is taking on the leaking hull of a dying approach to unified communications.

The challenge is to drag an audio legacy into a video-first business world.

UCaaS Means Video

Mitel’s ambition is no doubt to add its name alongside those of Cisco and Microsoft atop the UCaaS hierarchy–Cisco currently has far more than twice the market share of Avaya and Mitel combined in the voice vendor stakes, but it is Microsoft that has better managed the switch to more powerful video market.

With digital VoIP networks having long ago greatly expanded the potential of analog technology, video and multimedia have become key parts of the UCaaS reality. Today’s business community has seen the advantages of video and multimedia communications, meaning that audio-only is no longer enough.

Microsoft has followed trend-setter Slack into the centralized digital workflows of workplace communications.

Microsoft has led the charge toward making unified communications a more user-friendly, consumer-focused offering. It has invested in the touch-screen simplicity of video conferencing room systems, and has followed trend-setter Slack into the centralized digital workflows of workplace communications–its move away from Skype for Business in favor of new platform Teams is one of the biggest leaps of faith in the UCaaS model we’ve ever seen.

So now Mitel stands ready to at least join the UCaaS conversation with one of the Big 5, if it can leverage Avaya’s old-school client list into a competitive cloud customer base.

That move has the potential to improve the UCaaS market for everyone.

A Unified Communications Cloud

As we said earlier, the rise of UCaaS takes much of the risk out of unified communications attempts by even the smallest companies. With Mitel taking on the infrastructure burden, their customers are left to manage an annual subscription rather than a large capital Graphic describing the advantage of UCaaSinvestment. With Avaya’s hardware in tow, Mitel could potentially also offer the less-common Device-as-a-Service model and supply everything from conference cameras to digital video platforms on a pay-as-you-go arrangement.

The availability of such services puts businesses, even small ones, in the driver’s seat. It removes much of the financial risk of a decision like this and empowers them to seek the best possible deal from a range of cloud-based video vendors. It is a customer-centric reality of the digital age that makes it possible for companies to coordinate their communications with very little trouble.

With a UCaaS deal in place, workflows can be combined to encourage instant communication and collaboration.

With a UCaaS deal in place, your company can link together all its audio, video, and multimedia concerns. Internal and external communications become common across every team, and workflows can be combined to encourage instant communication and collaboration, even among remotely located teams.

If the Mitel Avaya merger goes through, it will create one more UCaaS option striving to impress us with digital efficiencies that ultimately make our working lives easier. And anytime someone offers to ease our infrastructure concerns in return for a short-term subscription, we win.

Subscribe to VC Daily