Mitel Acquires Toshiba’s UC Assets and Support Contracts in New MoU
Toshiba’s decision to close its Telecommunication Systems Division (TSD) and exit the North American business telecom equipment market earlier this year caught many of its customers, resellers, and dealers by surprise. Toshiba TSD was in business since 1975, and has always been considered by many as an innovator in the telecommunications industry, offering a wide range of telephone system products and other business solutions. But as the telecom industry has slowly shifted in the past decades from on-premise towards the cloud, Toshiba seemingly failed to keep up. Now, with their departure from the telecom market, many of Toshiba's customers and channel partners are in a limbo state, growing increasingly concerned about the viability of their Toshiba phone systems and scrambling to find a replacement vendor.
Fortunately, concerns about this telephone system transition are being eased in lieu of a significant development announced earlier this month. Global enterprise communications leader Mitel (Mitel Networks Corporation; NASDAQ: MITL: $6.90) announced that they are taking over Toshiba’s Unified Communications systems business assets and support contracts after they signed a new Memorandum of Understanding (MoU) with Toshiba Corporation.
Continuing Consolidation in the UC Market
Under the MoU, Toshiba Corporation will transfer certain assets and support obligations (as well as existing inventory) to Mitel. A transition services agreement that will ensure product and service continuity for Toshiba customers is also underway to keep the process smooth for existing customers. Although no specific financial details regarding the deal were disclosed, industry experts believe that the transaction represents an excellent deal for Mitel and will allow the provider to strengthen its hold on the market.
"Toshiba's communications business is a perfect complement to Mitel and ultimately benefits our current customers and channel partners by expanding our footprint capabilities," said Wes Durow, Chief Marketing Officer for Mitel, in an interview. "In doing so, it further expands our scale as more and more businesses seek a seamless path to cloud-based unified communications and collaboration capabilities."
Mitel, under CEO Rich McBee, has been acquiring many smaller UC vendors in recent years in an effort to scale up their presence and eventually create a company strong enough to challenge larger players such as Cisco and Microsoft. With McBee at the helm, Mitel has already acquired technology companies prairieFyre, Aastra, OAISYS, and Mavenir. The company also tried acquiring ShoreTel and Polycom. Mitel notably failed in its acquisition of Polycom as the latter backed out at the last minute to approve a higher offer from Siris Capital Group. Acquiring Toshiba’s assets further highlights Mitel’s intention to focus on expanding their position in the market as well as provide Toshiba customers a clearer view of the future.
What Toshiba Customers and Dealers Can Expect
The transaction, which is subject to completion of definitive documentation and other customary conditions, is expected to be finalized early this summer. Nevertheless, Mitel has already released helpful information and a guide for current Toshiba customers and dealers to make their transition to Mitel as smooth and seamless as possible.
For Toshiba customers:
- Mitel guarantees to provide customers the support and service they need during the transition period. Beyond the publicly stated May 22 “last order” date by Toshiba, customers can enjoy continuity with added product and service offerings from Mitel.
- Current Toshiba contracts remain valid with Mitel promising to fulfill all contracts following the closing of the deal.
- Warranties will also be accepted by Mitel.
- Customers can expect no service quality or policy changes.
- Toshiba inventory levels are not guaranteed to remain the same, but Mitel expresses their confidence to ensure continuity of supply.
- Quotes customers have received on Toshiba solutions will be honored as long as they are backed by Toshiba or an accredited partner.
- Since Toshiba US business is downsizing, a plan to relocate Mitel and former Toshiba teams to a local office is in the process.
- Customers will be provided with a detailed list of new services, products, or features soon.
For Toshiba channel partners:
- It is business as usual for channel partners as the change in ownership will not affect channel partnerships.
- Existing warranty agreements will remain valid for the terms of the contract.
- Regarding concerns about purchase, training, and fulfillment processes, Mitel says that they are working towards ensuring that existing Toshiba online tools and processes remain. However, a single purchase, training and fulfillment process will be announced once logistics and facility are fully integrated with Mitel.
- Channel partners will not be required to secure any new training certifications, except for any incremental products or services the dealer might wish to offer from Mitel’s broader portfolio.
- Mitel is yet to announce which Toshiba representatives will continue to support channel partners.
- Mitel says they are confident that the demand for Toshiba’s solutions will increase now that it has joined the Mitel family.
- Mitel further highlights that they are looking to add partners and not cancel reseller agreements.
For more information on Mitel and how they are strengthening their global leadership position in cloud communications, please visit Mitel’s website.
About Mitel
Mitel (Mitel Networks Corporation; NASDAQ: MITL: $6.90), a global leader in the enterprise and mobile communications solutions space, is changing how companies across the globe connect, collaborate, and take care of their customers. Mitel offers a robust range of products and solutions that enable cost-effective, reliable, and efficient communications and collaboration. Their products include MiCloud Communications, MiContact Center, MiCollab, MiVoice, MiTeam, mobile products, as well as business phones.