Mitel completes Inter-Tel purchase, claims SMB leadership

Convergence & VoIP This newsletter is sponsored by Quantum Data de-duplication whitepaper Meet regulatory data storage demands without breaking the bank. Discover what data de-duplication can do for you. Network World's Convergence & VoIP Newsletter, 08/20/07 Mitel completes Inter-Tel purchase, claims SMB leadership By Steve Taylor and Larry Hettick Mitel Networks and Inter-Tel last week announced the completion of their merger, making Inter-Tel a wholly-owned subsidiary of Mitel. Mitel paid an estimated $723 million for the voice-data convergence equipment maker, as disclosed when the deal was announced in April 2007. Annual 2006 sales for Mitel totaled $387 million while Inter-Tel’s sales came in at about $458 million for the same period. Both companies supply IP telephony systems, they are especially strong in the small and midsize business market, and they have been moving “up-market” to supply systems to larger enterprise customers. Network World VoIP and Convergence Buyer's Guide Find the right products for your enterprise - fast. Our extensive database of detailed product information will quickly help you pinpoint the hardware or software you need to build out a converged voice and data network. With the side-by-side comparison tool you can evaluate product features and make the best decision for your enterprise. Click here to go to the Buyer's Guide now. In a prepared statement, Don Smith, CEO of Mitel said: "Inter-Tel’s people, products, managed services and partnerships complement those at Mitel and will enable us to accelerate our growth strategy by extending our [SMB] leadership position and continuing our expansion into the large business sector." In the same statement, the company laid claim that it will now be the IP telephony market share leader in the North American SMB market and in the U.K. communications market, and it will become the No. 2 provider in the Western European market based on market share. Mitel will continue to maintain Inter-Tel’s Arizona headquarters as both the operations center for the combined U.S. business and as a center for research and development. Our analysis: Both companies have enjoyed success in the crowded SMB market, and we believe the merger will help the combined entity to be an increasingly effective SMB competitor. But we remain unconvinced that even a company with $800 million in annual sales will dislodge Cisco, Nortel and Avaya from their large enterprise market positions. We also note that the competition for IP telephony system sales into the SMB market is becoming increasingly competitive, evidenced both by SMB-centric product announcements across the industry and by the legal wrangling between competitors. For example, Mitel and ShoreTel recently filed patent infringements lawsuits against each other in U.S. Federal District Court, making claims and counter-claims. But the bottom line? While merger synergies always take time to show results, we believe that customers from both companies will benefit because the combined entity will have a broader portfolio, increased sales channel support, and a larger R&D staff.   What do you think? Post a comment on this newsletter

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Contact the author: Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. For more detailed information on most of the topics discussed in this newsletter, connect to Webtorials, the premier site for Web-based educational presentations, white papers, and market research. Taylor can be reached at taylor@webtorials.com Larry Hettick is an industry veteran with more than 20 years of experience in voice and data. He is Vice President for Telecom Services and Infrastructure at Current Analysis, the leading competitive response solutions company. He can be reached at lhettick@currentanalysis.com This newsletter is sponsored by Quantum Data de-duplication whitepaper Meet regulatory data storage demands without breaking the bank. Discover what data de-duplication can do for you. ARCHIVE Archive of the Convergence & VoIP Newsletter. BONUS FEATURE IT PRODUCT RESEARCH AT YOUR FINGERTIPS Get detailed information on thousands of products, conduct side-by-side comparisons and read product test and review results with Network World’s IT Buyer’s Guides. Find the best solution faster than ever with over 100 distinct categories across the security, storage, management, wireless, infrastructure and convergence markets. Click here for details. PRINT SUBSCRIPTIONS AVAILABLE You've got the technology snapshot of your choice delivered to your inbox each day. Extend your knowledge with a print subscription to the Network World newsweekly, Apply here today. International subscribers, click here. SUBSCRIPTION SERVICES To subscribe or unsubscribe to any Network World newsletter, change your e-mail address or contact us, click here. This message was sent to: networking.world@gmail.com. Please use this address when modifying your subscription. Advertising information: Write to Associate Publisher Online Susan Cardoza Network World, Inc., 118 Turnpike Road, Southborough, MA 01772 Copyright Network World, Inc., 2007