in Mitel Telephone Systems

Mitel, Shoretel’s just not that into you

After weeks for not talking to Mitel, it looks like Shoretel’s Board has managed to stay independent, as Mitel announced they are withdrawing their bid to acquire Shoretel. Reaction is pretty muted in the scant press that serves our industry, though some consultants that have historically worked with Shoretel were happy about the outcome.

Shoretel is a cruel mistress

Mitel will be curling up to watch this over the weekend (in German, because they are No.1 in W. Europe, see)

Key takeaways from this episode:

  1. No one is dying to get into enterprise telecom. No one else put a bid out for Shoretel.
  2. Competitors were not interested. As we mentioned in prior posts, competitors were not going to materialize as bidders. Avaya is up to its ears in debt, Cisco walked away from the small-to-medium business market Shoretel and Mitel are fighting over, and the Asian brands (NEC, Toshiba, Samsung) tend to pick “make” over “buy” no matter how bad their product turns out.
  3. Mitel continues to exercise Canadian prudence. Mitel was put in a position of bidding against itself, gamely upped the bid 40c a share, and walked away when Shoretel wouldn’t come to the table. The real risk for Mitel dealers is that Mitel made a bad deal to knock out a competitor and become saddled with debt, which fortunately did not happen.
  4. Wall Street gave a big shrug. Stocks for both companies barely moved, with trading volume for Shoretel off a third from the average.
  5. The hate between the two companies burns bright. Shoretel’s Board choosing to decline the offer is one thing, but refusing to discuss either offer with Mitel leadership is a sign of continued enmity between the two firms.

I am a little disappointed because I would have liked Mitel to capture some of the Shoretel magic when it comes to marketing their products. I am sure Shoretel dealers would have liked the SIP, contact center, security and virtualization capabilities Mitel brings to the table.

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