The News: Mitel, a global leader in business communications, and RingCentral, a cloud communication solutions provider, announced a strategic partnership that will give Mitel’s global customer base a migration path to RingCentral’s Message Video Phone (MVP) cloud communications platform. Read the full press release here.
Mitel and RingCentral Announce New Strategic Partnership
Analyst Take: With this strategic partnership, RingCentral will become Mitel’s exclusive UCaaS partner. MVP will integrate with Mitel’s CloudLink technology providing Mitel’s customer base of 35 million with an easy path to migration to the cloud phone system. This new partnership is a big move for both as RingCentral is looking to capture a bigger share of the UCaaS market and Mitel is looking to drive more innovation for the future, which I’ll get into later.
The Details of The Partnership
RingCentral will pay $650 million to Mitel to acquire intellectual property rights and patents covering network and call management, security, and infrastructure. On the Mitel side, the company will invest $200 million in equity in RingCentral.
Additional developments, product enhancements, and joint technologies will begin in the first half of 2022. But I believe will be seeing the impact of this partnership play out for years to come as the UCaaS market continues to expand through the shifting hybrid work landscape.
The Benefit for Mitel
This is a big partnership for RingCentral. The UC organization is expanding its market reach without a costly merger or acquisition and could pay off nicely. But the even bigger winner here, in my opinion is Mitel. In the short-term, Mitel’s 35 million customers gain an easy path to a best-in-class cloud solution. Mitel’s CloudLink allows customers to use their on-prem Mitel product and bridge to any cloud based UCaaS. RingCentral’s MVP will now be that solution.
By shifting IP and patents to RingCentral, Mitel is leaving a big part of the research and development arm to RC. This is freeing up money and time for Mitel to focus on something else — something bigger.
The opportunity here for Mitel is to grow and expand its UC business while scaling in parallel with RingCentral’s acceleration in the cloud. The company will be able to focus more on delivery and innovation of unified communication services be it on prem, subscription based or private cloud—while having an offering for a variety of customer needs. This is a smart move for Mitel in the long run, and a good step forward under the leadership of now chairman of the board Mary McDowell, and new CEO Tarun Loomba. By essentially shifting portions of the direct customer-focused business it can spend more time dedicated to innovating other cloud solutions that will represent current and emerging customer needs. I’m sure that we will continue to the impact of this deal play out for years to come, and we believe it was a sound and timely move for Mitel and RingCentral.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
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Image Credit: UC Today
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio