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Mitel-Polycom Tie-Up Could Spark UC Innovation

March 21, 2016

As videoconferencing behemoth Polycom and enterprise tech giant Mitel reportedly pursue a merger, channel partners and industry-watchers are eyeing the deal as an opportunity for the two to architect a brand-new, cutting edge communications company.

"If they're not just merging, but re-engineering themselves as a developing technology company, they have huge potential with their [channel] partners and distribution capabilities to create a developed mind share of emerging technologies," said Gary Berzack, CTO/COO at Polycom partner eTribeca, in a recent interview.

Rumors of a tie-up have persisted since October, when activist investor Elliott Management revealed that it had major stakes in both companies (6.6 percent and 9.6 percent for Polycom and Mitel, respectively). Sources said that Elliott was pushing for a combination of the two.

"Polycom must initiate a comprehensive review of all strategic options, and the time for that review is now," Elliott said in a letter to the company's board.

Elliott said it would be willing to provide financing for Polycom's acquisitions.

Now, sources have told Reuters that Mitel, the smaller of the two companies with a $1.11 billion market value, is looking to in fact buy Polycom. Sources said that the talks remain fluid and the final structure is still being worked out.

U.S.-based Polycom and Canadian Mitel both have a significant stable of legacy products—mostly video conferencing for the former, and IP PBX and voice for the latter. But both have pivoted, and more recently have been dedicating their R&D to unified communications, with Polycom looking to do more with voice. The two have an opportunity to co-develop interesting UC mash-ups if the merger goes forward.

"We don't have a solid selection of voice over IP solutions that will run over Wi-Fi. It's never quite blended well how to address the mobile market," said Berzack. "Reliable voice over Wi-Fi is an example of what [a Polycom-Mitel could create], with both soft clients that run on Android and Apple IOS and dedicated hardware mobile devices."

Edited by Maurice Nagle

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