Atos Unify, which is stronger in Europe while Mitel is stronger in North America, has a much stronger services business than Mitel, which should help to provide Mitel partners with upmarket services opportunities.
Unified communications and collaboration [UCC] vendor Mitel has announced the acquisition of Atos Unify, the UCC business within Atos. The deal, which is expected to clear regulatory hurdles and be approved within the next six to nine months, will add significantly to Mitel’s business. In particular, the Mitel business will be strengthened in Europe, where Atos Unify is stronger. Atos Unify also is aimed higher in the market than most of Mitel’s customer base, and has a stronger services play, and these should also help Mitel partners build up their business.
Atos announced at their Capital Markets Day in June 2022 that they would be divesting some of the assets the company considered less strategic. This fit well with Mitel’s plans, which were looking to enhance precisely this type of asset to build up their UCC business further.
“We entered into exclusive negotiations with Atos to acquire their Unified Communications business because we want to lead the market,” said Tarun Loomba, president and chief executive officer of Mitel. “This cements Mitel’s commitment to UCC.”
Loomba, who will serve as president and CEO of the combined company, which will continue to be called Mitel, said that the new company will be considerably larger.
“We will have a collective customer base of more than 75 million users in over 100 countries and a channel community of over 5,500 global partners,” he said. “It will extend our product and service portfolio with a lot of depth, especially in the enterprise space, and will give customers more choice and give partners expanded scale and an extended product portfolio.”
Atos Unify was originally the Siemens Enterprise Communication division, and dates from the 1970s.
“They were sold to a private equity company, and then sold to Atos in 2015,” Loomba said. “They are about the same size as legacy Mitel, with about 3000 more employees.
“They have a large services footprint, however, while we have been more product focused,” said Martin Bitzinger, SVP of Product Management at Mitel. “There is some overlap, but generally Mitel has been more focused on the midmarket while Atos Unify has concentrated on very large enterprise products and surrounding tools.”
“We are looking to extend our approach in the overall market,” Loomba said. “We have a strong portfolio in the SMB to midmarket space. They are midmarket to enterprise. Our sweet spot is the 5000 seat market. They have customers with tens of thousands of seats. Their product scales to that level. So it lets us hit the entire spectrum of the UCC market.” The deal will see Mitel acquire Atos Unify’s voice platforms, collaboration and contact centre products, device and endpoint portfolio, and related intellectual property. Mitel will also acquire Atos Unify’s enterprise-focused Managed Services business.
The portfolios also complement each other geographically.
“Their main focus has been in Europe, while Mitel is much stronger in North America,” Loomba noted. “With their services capability we can go much higher and upmarket in North America than in the past. We have a few large customers in North America, but this will help us get more.”
“Customers in those 10,000 seat deals and up really want one throat to choke,” Bitzinger said. “We would often lose deals to guys with those capabilities. So this is a win for both us and for our partners.”
“I don’t envision us using these new assets to go downmarket,” Loomba added.
Full channel integration is still a considerable distance down the line.
“First, we expect that it will take six to nine months just to close the deal, and then the true integration will begin,” Loomba said. “We plan to accelerate that as fast as we possibly can, likely in 12 to 18 months. We will make it clear that we won’t be competing with our channel partners and that we will leverage their talents as well. This will enable us both to go after larger customers.”