Welcome to No Jitter’s Conversations in Collaboration. Over the next few conversations, we’ll be covering a broader range of topics than just generative AI and productivity.
In this conversation, we spoke with Eric Hanson, Mitel's chief marketing officer. Hanson is responsible for setting the company’s global marketing strategy, including solutions marketing for Mitel’s extensive communications portfolio, demand generation, brand, partner marketing, customer lifecycle programs, and global communications. Prior to Mitel, he was CMO at OneSpan, a provider of electronic signature and cybersecurity software. Before that, he was CMO at Fuze which was acquired by 8x8 in 2022.
Our conversation with Hanson focused on the on-prem versus cloud deployment strategies facing most enterprises today. Hanson suggested that a mix of different delivery mechanisms – prem, private cloud, public cloud – are all important. What matters are the individual enterprise’s business requirements with respect to their industry, use cases and employees to be supported.
No Jitter (NJ): Can you talk a little about Mitel’s press release that reaffirmed its commitment to the UC market? It dropped at roughly the same time as the news that NEC would exit the UC market outside of Japan.
Eric Hanson (EH): Our release was not specific to NEC; the crux of [our] announcement was around our strategy [to remain] committed to the overall unified communications market. Over the last several years and certainly in the [pandemic’s] wake, [UC] has been all about public cloud and ‘as a service.’
We have a different perspective in terms of where the market is going. Reaffirming [our] commitment really starts with the customer – what the business strategy is and the deployment strategy. The commercial terms should follow that not the other way around. Our press release [helped] emphasize that piece of our strategy.
The other piece to the announcement stemmed from how we’re thinking about the importance of integration and multimodal as important components to how you build the right foundation for your business [regardless of the] organization size because mileage does vary.
NJ: Over the last year or so I’ve mostly spoken with cloud vendors, and a lot of those conversations have been around generative AI, for obvious reasons. I always ask those vendors ‘can Gen AI be done on-prem’ and their immediate answer is ‘no,’ – which I understand, because the foundation models are so big and expensive to build, run and maintain. However, there are concerns about Gen AI – what data they can access, what they might ‘say,’ or do with API access, regulations, etc. What are your thoughts on that topic, broadly speaking?
EH: Obviously, the cloud vendors [usually] say everything's going to be in the cloud and, in many cases, they say everything's going to be in the public cloud. They think that’s the final destination and I think you already know that's not necessarily our perspective. I don't think we're alone in that view.
I've had conversations with Zeus [Kerravala] about this as well. He believes that more of a hybrid, multi-cloud approach [may make sense] whether you're talking about AI or other use cases where speed of light challenges are a reality and a challenge to doing the right thing for delivering [certain] use cases. You [need] more of a distributed approach, I think.
In the case of AI, I tend to lean more in the direction of it is a [case] where some things are done centrally, whether that's public or private cloud, and some things are done at the edge, because that's what makes sense to address the speed of light challenges. [Take] health care, for example, where milliseconds matter and [bouncing] back and forth between the public cloud or the cloud in general, [may not] address the needs of that [sector] practically or from a scalability perspective.
Stepping back from the communications landscape for a second – and this is just my personal opinion – that's why Nvidia is doing what they're doing. They aren’t going to tell you that everything's going to be in the cloud. They'll [likely] say that a portion of it will be [done in the cloud], and a portion will be done at the endpoint or on premise at the edge because that's what makes sense from a practicality of compute [standpoint]. For them, the good news is obviously that they're banking on the fact that they'll be powering the GPUs behind all of that. That's probably their business strategy.
Bringing it back to communications, our perspective is the ‘right tool for the right job.’ A pure public cloud vendor is of course going to say that public cloud is the destination because that's what they have to sell. That said, I was on a panel at Enterprise Connect where you had companies that have historically been public cloud-oriented technologies who were saying that there needs to be a mix.
From our perspective, you have to have a mix – whether you're talking about AI and large language models that sit somewhere centralized, whether that's public or private (depending upon compliance, regulatory and other things that are important to your business) or whether it’s splitting that load into [smaller] language models that are handled at the edge or in some cases at the endpoint. For some use cases, I think that's what will be required.
It's similar for communications. We have a police department in the UK, for example, where (in the UK there are certain aspects of their business that are required to be on prem for security and real-time operations reasons) that entity’s back office uses Microsoft Teams for their general knowledge workers within the police department.
That’s a good example of a deployment that mixes different delivery mechanisms – prem, private cloud, public cloud – which are all important in that scenario [as well as] the deep integration to other solutions that are specific to that [sector]. But horizontal solutions also matter. So that idea of integration becomes another core pillar of how it all comes together.
And then, of course, [in this example you have] multimodal from the perspective of the different mix of device types, whether it's mobile, or whether the use case requires things like DECT or other types of hardware that needs to be tightly embedded and integrated into how that use case is delivered. That requires a mix of technologies and delivery mechanisms so that organization can excel in serving its constituents.
So, I think it has to be a mix, but for each customer and each in each industry, I think it starts with the classic: What's the problem to be solved? Let's start there and work backwards.
NJ: On the architecture side of things, what does this ‘mix’ look like particularly from the enterprise side where there’s a range of what is already installed?
EH: Mitel is a big company. As of the last quarter, we became number one in the UC industry in terms of installed base, post-acquisition of Unify. That means we have a spectrum of customers and [therefore] we need to support a spectrum of use cases based on business size, industry, and geography. You need a depth to the portfolio to do that.
Starting at one end of the spectrum with a business where a public cloud first [approach] based on the simplicity of their business model might make the most sense – [maybe they’re] mostly knowledge workers – that’s where our partnership with RingCentral comes in. [Or maybe] they may want our telephony, but they want to use Microsoft Teams. We have deep integrations to support that scenario.
Equally important is the small dental office that doesn't have an IT staff and doesn't ever want to. They just want a simple, reliable business communications system that they can just ‘set and forget’ and maybe upgrade and expand as they go. Through our partners, we can support all those scenarios.
As you move up market, complexity obviously starts to increase. Different lines of business within an organization [might have] different needs. One part may be predominantly knowledge work based, other parts may be heavily oriented around call center while another could be a mix of frontline workers and knowledge workers that need a consistent streamlined experience. That's where the hybrid discussion becomes important – and having a professional services organization that complements our channel partners.
In that case, we can [help determine] the right mix of technology to support those use cases, and [provide that] consistent application experience for users. Some of that may be supported in the background by a combination of premise, private cloud and public cloud. It is important to have both the experience and the capability in depth on the team, and from a portfolio perspective, to support all those scenarios.
Frost & Sullivan just updated their forecast. I think the ‘as a service,’ segment – whether it's UCaaS or CCaaS – represents [about] 20 to 25% of the overall UC market, versus the combination of prem, private and public cloud (that many organizations are going to need because of the nature of their business) represents 80% of the business. So, from a market and size of market [perspective], that's actually the bigger opportunity and that's where we're playing.
NJ: Do you have any thoughts as to why, if 80% of the opportunities are in that broader, mixed market, there is such an apparent disconnect between the “buzz” generated by the cloud players versus companies that have their origins in the on-prem side of the market?
EH: Pre-COVID I think we saw ‘pure cloud as a service’ and it was still the early days of even a unified application experience between voice video and messaging. And certainly, the importance of online meetings and access to them and more, of course, helped drive momentum. Right before I [returned] to the communications industry, I came from an industry where every day I [participated] in a video conference reviewing and approving visual effects shots for major motion pictures. And that was before WebEx was even a word, right? It's not like this stuff didn't exist before; it was just very immature.
The shift to hybrid work in terms of remote versus ‘in the office’ style work put a lot of pressure on how [companies] accelerate [their] ability to drive flexibility in deployments that support all [their] remote workers.
Now that we’re a few years after the pandemic, [many] of those [vendors] are scrambling to figure out how to diversify their [product] portfolios because just promoting their business around ‘everything's going to the public cloud,’ or ‘as a service’ isn't working anymore and maintaining the same growth rates [is more difficult].
They've done a good job of tackling the use cases that used to be hard around general knowledge work and at creating that ‘single pane of glass’ for an application experience to support those users. But there’s more complexity in that 80% of the market, and that's where those newer solutions that are public cloud based maybe have a bit more difficulty.
Having come from one of those companies, I can tell you it’s much more difficult to support these [more complex] use cases that live in the top six to eight of the top ten industries in the global 2000 – health care, manufacturing, banking and financial services and insurance. These are all massive industries that generate a ton of revenue in the economy. And they employ more people than [most] other industries and two-thirds of their employees, at least, are frontline workers.
That's an area of the market [where] I think the newer solutions struggle and a ‘one size fits all’ approach isn't viable. I know that because I tried to address that in my previous life, and we were unable to do it fully. We could only go an inch deep and a mile wide; we couldn’t really get into the depths.
From a Mitel strategy perspective, our hypothesis is that a lot of other organizations including some of those newer cloud vendors, said, ‘Okay, UCaaS is now mature.’ [Microsoft] Teams may be leading that charge in terms of a more general unified communications solution, now they're all chasing – and you know this because you were at Enterprise Connect – the contact center, and AI as the new shiny object.
There's good reason for that. There's a good market for that, but it's still a fraction of the size of what the overall part of the market is – that 70 to 80% which requires a mix of technologies and delivery methodologies. We believe that's where the opportunity is for Mitel and where living at the intersection of hardware and software matters in terms of creating tailored experiences for all types of users, from the frontline to the back office.
There's good business there. It's a big market. It's one of the biggest markets alongside cybersecurity. And it does have a lot of laggard companies who wanted to let some of their [technology] investments ‘rust in place.’ Mitel is about letting them extend the value of those resources for a longer period as they bring in some of these newer technologies. Having the expertise to support that matters. For others, as in the police example, having a combination of prem and cloud matters, depending upon the type of users and the use cases, having the expertise to bring solutions that take advantage of both also matters. So that's where we're really thinking about specializing versus just chasing the next thing.
That's not to say that for Mitel AI doesn't matter, or some of these other emerging technologies don't matter, but we think of them more as enabling technologies to further those experiences versus a new category.
NJ: So could you talk a little bit about how Mitel is approaching that frontline worker opportunity because it's different from the knowledge workers side of things.
EH: We have the sort of alert systems where you need to be able to press a big red button – in manufacturing, the ‘person down’ button where you hit the big red button to trigger an emergency set of actions. Your communication system needs to be tied into that. The more traditional telephony and communications infrastructure is probably more attuned to doing that. Could a UCaaS solution tie into that type of workflow? Sure, the problem is – and I know this from my previous life – the reliability [must be] down to the millisecond. That matters for an assembly line or in health care for patients.
Another example of how these things come together for both frontline workers and consumers perspective, is a product we were talking about at Enterprise Connect – VCCS [Virtual Care Collaboration Service], which comes out of the Unify portfolio. It uses our own video conferencing software and it [in this example] supports telehealth. On top of that, and this is where we're starting to weave in some interesting things around AI, [it also uses] AI to summarize and provide the context for a doctor who’s maybe in a hospital and is engaging with a patient and needs to get up to speed very quickly. That's an example of where AI can streamline and accelerate the context for that health care provider.
I'll take it a step further. Say that patient is elderly and just came out of post-op. Their family, who has power of attorney, needs to hear what the doctor says. [But maybe] the extended family also needs to hear. So, how can you authenticate who's approved to be a part of that conversation? And maybe that conversation needs to be transcribed in a secure way, because some of those other family members may be hard of hearing, or maybe they don't speak whatever language is being used.
These are examples of how more traditional communications technology and new communications technology can come together in some interesting ways. They’re not so far-fetched, either. We’ve been doing something [similar] in Germany for some time and we're about to bring it to North America. So, in this example you’re taking the best of the old and the new and enabling a health care worker to be more productive while also improving the quality of care for the patient and their family.
In a more day-to-day health care example, a doctor probably has 10 times the engagement over video today than a general knowledge worker does. If you think about the depth of information that's shared, and the importance of security (whether it's tying into EPIC, or other things) there's a level of complexity that is different from rolling out Microsoft Teams to 10,000 knowledge workers in an organization. It's a very different scenario – and that's where we shine.
It’s not that there isn’t a market for [public cloud only]. What we're saying is this is a really big, underserved market and we think we're well positioned given that we're a software and a hardware company. We think we can solve those problems and help drive value for the customer – and also grow as a business.
NJ: Is that what was meant in the press release about ‘deep vertical integrations’?
EH: Yes. Health care will become an important vertical for us, as with the example that I just gave, but also public service, defense, air traffic control, dispatch and law enforcement or some of these other scenarios with similar use cases, [at least] in terms of command and control and communicating with the field. We're already delivering solutions around interesting combinations of premise-based, private cloud, and public cloud scenarios and seamlessly connecting the workers in those organizations.
In several verticals, we’re going deeper and partnering with companies [that bring] very specific, adjacent technologies that are particular to those industries. These [integrations] are not easy. They’re not ‘off the shelf’ or ‘one size fits all.’ [Often] those approaches only go an inch deep in terms of integrations where it’s: hey, we have open API's and people can figure it out. That doesn't work for some of these mission critical use cases.
They’re not easy because of the [tech] legacy [in those companies], the current state [of those solutions] versus the desired future state – and then bridging those to create something that drives value today, but also positions them for tomorrow. That requires expertise.
One of the important things that came out of the Unify acquisition was professional services. Today, 25% of our talent is in professional services. That's significant given the size of our company. Part of our value proposition is being able to complement what our partners do [while] also having enterprise centric experience to help customers navigate these waters in terms of what they have and where they need to go and how to connect those two worlds. Professional services are a really important piece and that's part of the reason why we made that investment.
NJ: I'd imagine a large part of this with Mitel’s installed base, and all the competing solutions out there, is providing a roadmap to show customers not only where you’re headed but how Mitel will incorporate that ‘new tech’ you mentioned earlier.
EH: The press release was one piece of this, and fortuitously in some respects, the NEC announcement coming out is a real-world case study. A friend of mine, whose name and firm I’ll leave out for obvious reasons, has already had several large NEC customers who are in health care contact him. Each of these entities have over 10,000 lines, so they're scratching their heads [wondering], what are we going to do? In a lot cases, organizations like these have had their infrastructure in place for more than 10 years. And the people that put it in place aren't there anymore, and maybe they never did a good job of documenting what they have, in terms of call groups and call routing, etc. And now they’re worried about how they’re going to figure it out.
For us, that's great. We can come in, assess the situation, and help document it. We have the managed services and we have people with NEC expertise – we've been migrating NEC customers for years. We can be that managed service bridge while they figure out what they want to do next. And when they’re ready to have that conversation, we can help scope it and hopefully convince them that Mitel is the best platform to move forward with. Then we can create a migration path that isn't just about the software but is also about the hardware devices because we manufacture not just phone sets but also DECT – we're number one in DECT worldwide. It's like chipping away at this thing to help a customer go from, ‘what am I going to do’ to helping them figure it out and plot a path for where they need to go over the next two years because that's what NEC has communicated that the timeline is.
That type of scenario aligns really well for us because it draws upon our premise-based experience, our professional services, and our knowledge of private and public cloud, to really connect the dots for that organization and hopefully help them navigate those waters.
Check out some of NJ’s Mitel coverage:
