Going Cordless with a Mitel or Zultys Telephone System

Yealink W52P Cordless

Yealink-W52P-cordless

Affordable, easy-to-use cordless phone for Mitel and Zultys telephone systems.

Yealink W52P is both SIP and DECT, providing you with a great combination of acronyms. The base stations connect to your IP network and register phones as SIP devices. This allows us to use them with the Zultys MX-250, MX-SE, MX-30, MXvirtual and Zultys hosted systems, as well as the Mitel MiVoice Business (3300 / MCD) and Mitel MiVoice Office (5000 HX/ 5000 CP/ 5200). You could also just register them with a SIP carrier if you just need a very small office or home office solution.

The wireless communications are using the DECT range, which is better than standard 5.8GHz cordless phones. DECT offers superior range (as much as 300′), lower power consumption for longer battery life, encrypted communications, and uses spectrum not occupied by other devices for clearer conversations.

Funny aside: DECT in the USA is called ‘DECT 6.0’ for the sole reason that American consumers had seen a steady progression of cordless products of higher and higher range – from 900MHz to 1.8GHz, 2.4GHz, and later 5.8GHz. While DECT operates at 1.9GHz frequency, there was concern that it would appear inferior to other, higher spectrum cordless devices. (Hat tip to Wise Geek).

Each telephone can connect to 4 base stations, and each base station can support 5 telephones. This allows you to put base stations around your office to expand the range of the telephone across multiple base stations, so you can wander around your office on the phone, looking very busy and important.

yealink-W52-Color-Screen

Lovely screen to interact with

The handset has a color display and can do all your basic office phone functions like transfer, hold, conference and indicate if you have voicemails via the color display and interactive keys.

The unit takes a standard 3.5mm corded headset. This allows you to use those iPhone 3G ear buds you have lying around, connect to your wireless Yealink office phone, and get a wireless headset that can finally transfer calls and put calls on hold while you wander around. Because the Zultys system allows users to associate 4 phones with each user, you can assign a desk and cordless phone to VIPs and operators that have a need to get up and move throughout the day. Zultys eliminates the confusion of having multiple extension numbers for the same user by assigning multiple phones to users.

yealink-w52p-Conference-call

Conference calling is very easy on the Yealink cordless telephone

Mitel On a Roll

Mitel new 2014 corporate logo

Mitel new 2014 corporate logo

Mitel’s new logo reflecting a role as a communications software developer, versus a telephone system manufacturer

As both of my regular readers know, once upon a time I worked as a stock analyst. While I no longer pick individual stocks, I still read the financial news religiously. Our very own Mitel Networks (MITL) has been prominent in the news, and not just for being one of the best VoIP telephone system manufacturers available to businesses throughout greater Los Angeles. It appears that abandoned bids for competitors aside, (which we commented on as well), Mitel is also doing pretty well financially of late.

Seeking Alpha’s Jarrod W. Jacinth wrote in Feb of 2013 that he was buying Mitel. His argument was that the company was a bargain at a price-to-earnings ratio of 4.42 at the time, given even fairly modest annual growth of 15% coming out of a restructuring. He used the Graham Number and found that even that very conservative measure determined that Mitel was undervalued. So from a value perspective, this is a fantastic stock. To give non-finance people some perspective, a P/E of 10 means that, with the profits generated today, you could buy the stock at today’s price in 10 years (assuming you are looking at annual earnings). The average P/E of the S&P 500 stocks as of Jan. 1, 2013 was 17 – Mitel looks pretty cheap at first glance.

Jacinth hypothesized that Mitel’s low stock price came from their debt load. In 2013, Mitel owed $313M with operating cash flow just shy of $39M. If we look at coverage ratios of operating income-to-total-debt, we get 0.12 ($39/$313). In the industry, Avaya in 2014 earned $197M in operating income on $6,023 of debt, for a ratio of 0.03. Shoretel for the year ending June 2014 earned $36M in operating cash flows on $47M in debt in 2013, for a ratio of 0.76. To their credit, they paid down 30M in debt through a combination of stock sales and operating cash flows, though like Avaya, the company continues to lose money on a net income basis. Cisco earned $12.3B in operating income for the year ending 6/30/2014, on $35.8B in liabilities, for a ratio of 0.34.

More recently (last week), David Zanoni wrote that the turnaround at Mitel is under way. He notes that cloud services are growing by double digits, driving recurring revenue ever higher. A year after the Jacinth article, the debt picture is looking even better. For the most recent quarter ending 10/31/2013, operating income was $54.6M, up 40%, and debt is down to $288M, putting the coverage ratio now at 18%. Most importantly, Mitel has had some time to integrate the large purchase of Aastra further into its operations and can start to reap the benefits.

Mitel and Aastra have merged

Mitel and Aastra, combining like Voltron

As an investor, despite the recent run-up in Mitel’s stock price, I would think that Mitel’s stock has room to keep going up, assuming it can keep up the pace it has established. As the revenue mix shifts to recurring revenue from the cloud business, the company will throw off more cash which can be used to get the debt burden down further and continue investing in new technology. Mitel has a strong position and can continue to reap the benefits and scale of the Aastra merger, such as cheaper unit handset manufacturing costs and sales of Mitel software into Aastra customers. Of course, this is all just guessing – past performance is no guarantee of future results, and you should do your own homework before buying a stock.

For companies considering Mitel, the recent financial results should make you feel at ease. Mitel is on a roll, and every indication is that the company has a lot of momentum heading into the US economic recovery. Unlike competitors such as Shoretel and Avaya, it is able to maintain profitable growth while investing in the future and paying down debt, no easy trick. Unlike the Cisco behemoth, Mitel will return your call if you have under 200 seats.

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.

Mitel, Shoretel Merger Drama Continues

Mitel and Shoretel will merge... or won't they?

The drama continues to unfold, and this is playing out as many in the press predicted. Mitel CEO Rich McBee has reframed the offer Mitel (MITL) made for Shoretel (SHOR), and that Shoretel rejected, as an opening bid. So far, there are no white knights on the horizon coming to save Shoretel, so Mitel begins the bidding war against… itself.

Mitel and Shoretel will merge... or won't they?

An awkward courtship between two rivals

Taking a look at the recent earnings out for dear Mitel, and you have a lot of bright spots. Mitel’s cloud business is taking off with over 800,000 seats sold. Year over year, recurring cloud revenue is up 50%, to 21.7M a quarter.  The quarter’s loss of 5.1M is actually small beans now that the Aastra merger is complete, amounting to 1.9% of over a quarter billion in quarterly revenue. Cash burn was 12M, leaving $120M in the bank. And another $25M of debt was retired in the last quarter, as the company continues to hack away at the debt burden that went up a sixth following the Aastra merger. 50 people were laid off following the merger, so there does not appear to be a wave of cost consolidation. All in all, Mitel’s story of incremental improvement and shift to a cloud-based business continues apace.

Having seen the product roadmap for Mitel following the Aastra merger, we can say conclusively that the Mitel MiVoice Office 250 (the branded Mitel MiVoice Office that was once the Mitel 5000 after it was the Mitel 5000 HX and the Mitel 5000 CP and the Inter-Tel 5200/5400/5600 systems) is here to stay. It will not be virtualized – that is where the Mitel MiVoice Business comes into play – but it is the Mitel system for the small to medium sized business of up to 250 users. There will be a new Mitel system from Aastra – the Mitel MiVoice Enterprise – that will support up to 500,000 users. Give us a call if you know of any Fortune 500 companies and small countries

If we look at Shoretel’s recent financials, we see an interesting moment in time – GAAP profit! Yes, Shoretel has made some money, though a paltry $366,000 on $90M in revenue for the most recent quarter. Top line revenue is up, they are keeping a lid on costs (snarky competitors will note: marketing is just about 1/3 of revenue and costs), all to be commended. Mitel has pissed all over their parade because this was the quarter Shoretel was waiting for, as they finally achieved enough scale to turn a profit. They are still sitting on a nice pile of cash ($57M).

Cloud though is not such a great facet of the business for Shoretel. Since buying M5, we have not seen a really good cloud story from the brand, since the two lines are not really integrated at this stage. Hosted revenue is up from a year ago, up $4M from $20M to $24M.  Competitors like RingCentral and 8×8 are showing massive growth every year. Vonage has leveled off – perhaps due to their large residential service component – but has close to $900M in annual sales.

Diving into the revenue numbers, we see flat product sales. The increase in revenue year over year at Shoretel is the $4M in cloud and $2M in support contracts and services. Support contracts are profitable for manufacturers but also limited as to how large they can grow – they are driven by product sales. You can only jack the price up on your support contracts so many times.

As far as the merger is concerned, Shoretel might want a more dynamic partner than Mitel, and definitely wants more money, but Mitel has shown that they have figured out a way to share a single software stream between premise and cloud, something we are still waiting on with Shoretel. I am not in a position to say whether this hurts Shoretel and accounts for their relatively sluggish growth, but the story with brands like Mitel and Zultys is much easier to tell – customers can just pick the way you want to deploy your system and not think about differences in how things work.

I can also report as a Mitel dealer that there is reluctance from the dealer channel to sell cloud, but no matter, as Mitel has a small army of direct sales reps. Shoretel is more reliant on their dealer channel, so if their dealers look at cloud the way our dealers do (they hate it, more or less) then the slow growth makes sense. Just as Mitel benefited from Inter-Tel’s US & UK sales machine when that merger took place, so Shoretel could start to look at their acquisition by Mitel as leveraging a Mitel sales channel that is already pretty familiar with their product, without hurting their loyal base of dealers who are stuck on premise anyway.

Shoretel’s cloud phones use SIP, their premise phones use MGCP, and until they update their core phone business to the SIP standard they will be at a disadvantage as the days of buying a phone to match your phone system fade into history. Mitel’s new SIP phones are out on the market and will probably make it very hard to compete now that Mitel can leverage Aastra’s scale for production and experience with SIP.

The premise system market is far from dead, but no one is dying to break into the industry, either. Shoretel and Mitel are far more nimble than the large companies competing against them in the SMB marketplace, and have better technology than the hosted-only companies in the space. As feisty as both companies are, it might be time to think about the possibilities a combination affords.

Mitel’s Shoretel Offer

Exciting times to be a Mitel dealer in Los Angeles. With a crowded marketplace full of Shoretel dealers banging into each other on every deal, many IT VARs, MSPs, IT and Telecom Consultants, and Telecom VARs and Interconnects are eagerly awaiting what shakes out, if anything, from the Mitel bid for Shoretel.

On October 20, 2014, Mitel (MITL) offered $540M for Shoretel (SHOR), an offer Shoretel’s board rejected. In fact, Shoretel has publicly scorned the offer as financially inadequate and tooted their own horn regarding their recent successes, giving every indication that they were fiercely independent and going to stay that way. Mitel sued them over intellectual property on the eve of their IPO, so this announcement, on the heels of a quarter where Shoretel managed to eke out a positive GAAP (Generally Accepted Accounting Principles) net income could be seen as part and parcel of Mitel habitually raining on a competitor’s parade.

Except, for one, Shoretel hired Blackstone to advise them. This offer comes on the heels of last year’s executive exodus at Shoretel and a wave of insider selling over the last 12 months – all signs that there is something odd going on. We are looking at some weird execution problems at Shoretel lately too – it took about a month to patch the HeartBleed problem on their core systems, and this is still going on – different protocols and phones for premise and cloud.

Odd choice of Phone

Cisco SIP for Shoretel Sky

 

 

 

 

 

 

 

 

This blog post takes a pretty tough stance, noting that the telecom equipment market is consolidating as businesses shift to the cloud and that Shoretel has run at a loss for 16 years in a row. I would argue that the numbers clearly show that Shoretel’s cloud business is getting some traction. The counter to that is that SHOR’s cloud business is of insignificant size compared to 8×8 (EGHT) or Vonage (VG), who combine for a billion dollars in cloud telephony revenue a year. I would add that Vonage has a gross profit margin of close to 69%, and 8×8 runs at nearly 71%. Premise manufacturers like SHOR (59%) and MITL (55%) are going to face some challenges supporting a large premise base while they pursue cloud. I think combining to wring efficiencies and scale out of their operations is going to be crucial if these old-line companies are going to compete with firms with that big of an advantage.

Since Shoretel shares are 83% held by institutional investors, it looks like the barrier to a purchase may be more about price than stubbornly independent Shoretel leadership. This article features shareholders explicit about wanting a price in the $10-12 a share range, versus the $8.10 price of Mitel’s first offer. The stock has been flat for some time, so I would imagine shareholders are excited to see some movement.

So what does it all mean for our customers? If you are considering a Shoretel system, be aware that underneath the tough talk in the press releases, Shoretel hired investment bankers and Wall Street might like to see the company sold, so they can cash out on a stock, and a sector, that has been pretty flat. I imagine Shoretel is hoping for a bidding war to drive the price up, which would be a Pyrrhic victory for Mitel if they take on too much debt, though it is hard to imagine who would want to get in the game ahead of a huge technology refresh cycle about to sweep the industry.

New IP Phones from Mitel

Just $299 for the best phone ever: Mitel 6869i

Four cool new phones and a new sidecar (button box) are out now for your lucky users. The Mitel 6863i, 6865i, and 6867i are SIP phones out today, with the 6869i available soon.

Pricing for the 6863i starts at $99 list price, increasing to $179 for the gigabit 6865i and $229 for the full color, large display 6867i gigabit phone. Current Mitel gigabit phones are, ahem, a bit more expensive, so this is a game changer for our customers. If you are considering moving into a suite with one Cat 6 or Cat 5e cable per desk, with the other cable is Cat3, like most offices in Los Angeles and Orange County, your choices are bad. Currently, customers have to choose between $300+ gig phones on gig PoE switches, or $200 10/100 phones plus a second set of PoE switches for the phones in addition to gigabit switches for user machines. With a $179 gigabit phone, moving to a single converged network is a no-brainer.

Besides having a compelling price, these phones are thin with small footprint. Turned sideways, the base of the phone is not more than an inch and a half thick. A complaint we hear about the Mitel 5300 series phones and the Polycom VVX series phones is that they take up a lot of desk space – these phones are from Europe, so naturally they are thin and stylish.

The 6865i, 6867i and 6869i phones can use industry standard EHS (Electronic Hookswitch) adapters. You should care, because we can use wireless headsets from Plantronics, Sennheiser and GN Netcom with these phones without a physical hookswitch lifter contraption.

Affordable SIP telephone from Mitel: 6863i

Mitel’s $99 SIP IP telephone the 6863i from Aastra

The 6863i is an ideal value telephone. This 2-line SIP phone sports a 128-by-48px display, HD Audio and two 10/100 ports. As with all Mitel IP phones, it supports XML for customization. New to Mitel phones is a 4-way navigation pad familiar to users of traditional video game controllers.

 

Gigabit and stylish. Beauty and brains.

Flexible communications with an awesome Mitel 6865i $179 Gigabit phone.

Mitel’s 6865i is destined to be the Toyota Camry of office telephones – ubiquitous, reliable, flexible, with charming looks. It is an inexpensive ($179) Gigabit phone, a rarity in the market. Supporting 9 calls as a SIP phone, this phone has a 128-by-8px display, dual gig ports, 8 custom keys in addition to 11 feature keys, a 4-way Nintendo directional pad, and volume rocker. Electronic Hookswitch support is included, as is HD Voice audio.

 

Top of the line gigabit IP phone at entry level phone prices

Mitel’s awesome $229 Gigabit color screen phone: 6867i

Mitel’s 6867i is designed for companies that are successful. Successful companies know that dropping another $40-50 on a vastly superior phone for their users shows their staff that they care. It also shows their customers that they (a) have good taste and (b) are in it for the long haul.

In addition to all of the goodies you would find in the 6865i like wideband HD audio, EHS, dual gigabit ports, low power consumption and handsome looks, the 6867i has a 3.5″ color QVGA screen, dual speakerphone microphones for exceptional audio, and an option for a detachable keyboard, expansion button modules (up to 3) and 6 programmable on-screen softkeys.

 

Just $299 for the best phone ever: Mitel 6869i

Mitel’s top-of-the-line gigabit 6869i phone features gigabit support and a 4.3″ color screen for $299.

Mitel’s 6869i improves on the 6867i’s perfection. This phone doubles the number of programmable softkeys from 6 to 12. It also offers an expanded 4.3″ color QVGA screen. Like the phone’s little brother 6867i, this model of SIP phone features an optional magnetic keyboard, dual gig ports, optional expansion modules, wideband HD Audio, low power consumption, and advanced audio processing with dual microphones.

Mitel 685i Full Color Button Console

Full color, LCD-based add-on console. Never print out paper labels again with the Mitel 685i.

The Mitel 685i is a sidecar for the 6867i and 6869i telephones, supporting 74 programmable stations across 3 virtual pages of buttons. Automatically updating button labels on a color display, this is an ideal device for a busy operator, power user, lobby phone as a directory, phones without attached computers nearby, or contact center agents and supervisors.

Xarios Phone Manager for Mitel

Mitel has a great constellation of 3rd-party products that write software for their telephone systems. The Mitel Solutions Alliance (MSA) Third-party Developers Program lets developers write to Mitel’s phone system APIs to create software that can integrate to your phone.

Xarios Ltd. is a leading provider of communication solutions for the Mitel and one of our favorite partners. The Phone Manager CTI desktop solution was exclusively designed for MiVoice Office, especially contact centers, sales and customer service personnel and knowledge workers. MiVoice Office users have a greatly enhanced user experience and dramatic productivity improvements with desktop apps that connect their Mitel phone to their PC.

Xarios Phone Manager (Release 3.0) Standard Edition provides a lot of cool features for Mitel users, such as:

  • Highlight & Dial – Highlight a number with your mouse anywhere on your screen and the number can be used in the PC clipboard to click to dial without even touching your phone.
  • Search & Dial – Instead of hunting through your phone’s display, you can access System Speed Dial, Personal Speed Dial, Internal Directory and the user’s CRM directory all at once from a single function.
  • Call Control – Stop touching your phone. Seriously. Answer, hang up, hold, transfer, conference and more, all from your PC.
  • Presence Status Visibility – See what everyone in the company is up to with icons on your PC, with an icon for everyone in the business. Just click an icon to call.
  • Call Details Banner – When on a call, view live information about the call and sync your CRM data instantaneously.
  • Instant Messaging – Chat/IM with other Phone Manager users on the system
  • Change Endpoint States – Set DND / Set Call Forward with custom states
  • Call History – View your call history to call people back with one click or confirm Caller ID / Date & Time of call etc.
  • CRM Integration – Out of the box, easily integrate to Outlook, Zoho, SugarCRM, Goldmine, Act, MS-CRM and many other popular CRM programs. We can also rope in Xarios professional service for custom integrations to your customer applications or databases.

Mitel Upgraded by S&P

Mitel got a boost when Standard & Poor’s rating agency raised Mitel’s credit rating to a B+ from a B.  Good news for Mitel customers and people considering Mitel who have had competitors whispering awful things about Mitel’s health.

On a practical level, this upgrade will help Mitel borrow money at lower interest rates as well as potentially drive more institutional money into Mitel the investment vehicle (versus Mitel the company that makes telephone systems). This could increase the stock price and thus make Mitel employees happier than they already are, with the stock price almost tripling over the last year. It can also help attract talent, as the story right now is of a company on the march, picking up market share and getting their financial house in order.

S&P specifically noted that the Aastra merger is going well. We were hopeful of this as the two companies rarely competed head to head, at least in North America. Mergers are a scary event for companies, with many good companies brought low by a botched marriage in our experience.  So far, so good, it appears.

As a reminder, you can always check out the numbers for yourself – Mitel’s stock ticker is MITL.

Mitel UCC v3 Released

Microsoft Lync is better with Mitel

Mitel’s seamless, classy integration into your Microsoft Lync environment

It is official, June 30 is the release date for the new version of Mitel’s UCC suite of applications, UCC v3.0.  This is a big release by Mitel standards with a lot of changes. We are excited about a few key elements.

As previously noted, Hyper-V support is here, as is VMware vSphere v5.5 support. This is a great solution for companies that are used to the way our competitors deploy their phone systems and applications: with a menagerie of servers or multiple virtual applications to manage and keep running.  This solution consolidates messaging, user deployment and unified communications applications, as well as off-site TeleWorking and security, to a single virtual instance.

Speaking of user deployment, the UCC v3 allows for a simple user rollout by linking to Active Directory.  This greatly speeds up deployments and makes it simple to manage your Mitel system.

Multimedia capabilities have also been extended to the smartphone, with peer to peer video available via the Mitel smartphone app. I expect personal grooming to be improved across all of my customer base once video calling becomes a standard part of business communications.

Integrations across the enterprise are expanded with this release as well.  Lync deployments will benefit from enhanced Mitel integration.  Google, Office 365 and Salesforce users will also find that there are a number of enhancements on the Mitel platform for their use, including calendar integration with presence, email integration, as well as click-to-call, presence and IM integrations. We see more and more adoption of these platforms and less traditional integration to on-site CRM software.

With the initial UCC release, Mitel did a great job of fixing the most irritating part of their platform for vendors and customers: their licensing.  The old alphabet soup of confusing licenses and license dependencies was poured into the trash, and replaced with 3 super simple license bundles: Entry, Standard and Premium. Now, a 4th tier (Basic) has been added, for users that just want a phone, while Entry users can see coworker presence on the bundled PC and web app. Right out of the gate, customers with a single UCC Standard or Premium license get a 10-port conference bridge license at no charge, too.  This makes it very difficult for Shoretel, Cisco, Avaya and NEC to compete. Each of these manufacturers needs to add an external server or, in Avaya’s case, a sorta-virtual-sorta-dedicated-server-image, to provide secure dial-in conferencing. But then again, these manufacturers really are in love with the miniature server farm model.

Solving Conference Calling

  1. Cold Fusion.
  2. CO2 emissions.
  3. Conference Calling.

Three of the most intractable challenges of modern science that also start with the letter “C”. For decades, humankind has struggled to fight energy dependence on fossil fuels and radioactive waste products, reverse global warming and the destruction of the only habitable planet we know of, and to get three people on a phone call at the same time.

We can all sleep a little easier now, as Mitel’s UC solution for conferencing has cracked the business collaboration code.  Mitel’s MiVoice Conference Phone makes three- or even four-way calling  dead simple. Just touch an icon, and dial a number to make a call.  Then, touch a second icon, dial a number, and the call is automatically joined.  If you want a fourth person on the call, well, repeat the process. No feature codes, no complicated sequence of events, no secret handshakes, combination of button presses or whispered passwords.

Did I mention it runs on Android, features incredible quality 22kHz Wideband Audio, integrates with a built-in browser to web applications, hosts native apps such as Dropbox, OpenOffice for Microsoft Office doc integration, WebEx, and Join.Me, supports an HDMI video output for presentations, has USB connectivity for connecting your PC, features 16 microphones with a 12′ 360-degree audio pickup radius, and of course provides amazing Mitel Unified Communications connectivity?

 

Mitel MiVoice Conference telephone

Mitel MiVoice Conference unit for innovative, enhanced audio, web and video conferences.