How will UC market consolidation affect the channel?
Several vendors are predicting a wave of mass consolidation to hit the UC and telephony market, Josh Budd looks at how it will affect the channel
While no vendor sales or channel executive can claim to be in possession of a fully-functioning crystal ball, hear the same story enough times from enough people and you'll be forgiven for thinking it could be true.
An exec warned me last year that the UC market is about to undergo mass consolidation, and tech firms will be forced to decide whether to ride the M&A wave, or succumb to it.
Mitel's three-year courtship to acquire US rival ShoreTel might have had its share of ups and downs - with Mitel's $8.50-a-share and $8.10-a-share offers in 2014 proving insufficient in winning the UC vendor over - but its eventual triumph last week in securing ShoreTel for a significantly lower 7.50-a-share might be a telling sign of the UC market as a whole.
According to Mitel's executive vice president of global sales Todd Abbott, ShoreTel's decision to finally give in and sell up is a reflection of a UC market on the tipping point of consolidation, in which it is essential for vendors to gain bulk and R&D muscle in order to stay in business.
Meanwhile, cracks have begun to show in some of the industry's most established and long-standing players. Avaya filing for Chapter 11 bankruptcy at the beginning of the year has certainly created something of a partner feeding frenzy among its competitors. Executives from Mitel, ShoreTel, and European-based UC vendor 3CX have all said that they are winning partners as a result of uncertainty thrown up by Avaya's financial troubles.
Yet, while some Avaya partners are convinced that the communications behemoth will come back better and stronger than ever, one would be foolish to ignore the opportunity this has created for its rivals.
Even Toshiba, another industry incumbent, has shed its UC business - perhaps another indication of a market where vendors need to either get big, or get out.
And it's not just the industry's behemoths who are revising their chances of survival in the UC space. Cypriot vendor 3CX recently made a move to grow its market share in Germany this week through acquiring Hanover-based VoIP vendor Askozia, the first in a string of European-focused takeovers it plans to make this year.
The firm's CEO once told me that Europe is home to around 100 PBX vendors - a figure he estimates will plummet to "maybe 10" in the next five years.
So what does all this mean for partners? Mitel and 3CX, although serving different ends of the market, generate the majority of their top lines through partners. While ShoreTel partners and Askozia partners will certainly be undergoing a period of change, the end result will mean a broader array of products to take to the customer.
Resellers and MSPs will be hoping their vendor partners have what it takes to competently integrate sales and technical teams and product portfolios at the same pace with which they consolidate the UC market.