Friday, November 7, 2008

Mitel's News - Managing in Tough Times

In a sign of the times, Mitel held an analyst roundup call this afternoon to update us on some important and timely developments. It was organized on short notice - today - and I guess they felt it necessary to get some clarity out there in advance of VoiceCon next week.

The call was quite short - about 15 minutes, and I couldn't make it, but got a debrief right after from Mitel's Kevin Johnson. I don't often do newsy items like this, but I think it's telling about the precarious state of the telecom market, and of course, the economy in general.

In short, Mitel is reducing headcount, although the number was not disclosed. This is a private company, after all, so they are not as obliged as public companies to elaborate. What they did say was that two senior, high profile management members were effected, and they're well known to the analyst community. It's not clear if the names should be public at this time, so I'll just leave it at that.

It's never good news to hear about cuts, especially with people you know. One of my long time colleagues at BroadSoft was part of their recent cutback, and many companies are rightfully seeing the need to cut costs now in anticipation of a slowdown in new business.

Mitel was clear about this, and emphasized how this is particularly true for the SMB market, which is core to their business. SMBs are by nature cost-conscious, and in tough times will stop spending pretty quickly.

While Mitel isn't the only vendor cutting back, they're a pretty big player in the SMB market, and if you're looking for a canary in a coal mine signal, this is a pretty good one. Don't be surprised if you start hearing similar stories pretty soon from their competitors. Signals have been pretty strong about cuts at Nortel, and everyone is facing similar challenges right now.

That said, the call was not all gloom and doom. This is nothing like the implosion happening in the auto sector right now. That's downright scary. The good news was that Mitel will be launching their UC solution at VoiceCon next week, and this is probably the best and most public showcase for how well things have gone with the Inter-Tel acquisition.

I won't be at VoiceCon I'm afraid, but you won't have to look far to hear how the launch is received from those who will see it first hand. For the overall sake of the IP telephony space, I sure hope it's a hit.

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