Mitel Re-Unites with Tech Data
Mitel Re-Unites with Tech Data by Dave Michels
Mitel will begin distributing some of its U.S. products through Tech Data. It has taken several years, but finally I get to say, “I told you so.”
Distributors are key to a healthy and successful channel. Most vendors are not particularly good at distribution which is far more complex than just putting a box on a truck. A good distributor gets pick, pack, ship – as well as financing, inventory, forecasting, returns, promotions, training, lead generation, technical support, pre-sales assistance, and more. Some distributors even do partner recruitment. Distribution has changed dramatically as products turned into licenses, but licenses still require logistics.
Mitel had a strong relationship with Tech Data. It was created just-in-time as its long term distribution partner, Sprint North Supply, abruptly changed its business model. Sprint North Supply became Embarq and now lives as KGP Logistics. Tech Data assumed the whole line for Mitel. With a special arrangement with Mitel and GE Capital, extended terms were offered to dealers through Tech Data.
When Mitel acquired Inter-Tel in 2007, it opted to utilize Inter-Tel’s in-house distribution capability with its other products. All distributor agreements in the U.S. were terminated, which is when I told Don Smith, then CEO of Mitel, that it was a big mistake. It was not a smooth transition. The Mitel product was significantly more complex than Inter-Tel’s, resulting with lots of problems.
Tech Data is one of the largest wholesale distributors of technology products. They support over 125,000 resellers in more than 100 countries, and is ranked 109th on the Fortune 500 list. Distribution is not a simple thing to just internally absorb, especially while taking on an acquisition. Mitel and NEC are the only major UC premises vendors that internally do the heavy distribution lifting.
It was a rocky transition, with lots of issues and mistakes, but Mitel eventually smoothed-out distribution. It isn’t clear actually what is motivating Mitel to return to distribution now, but two-tier distribution is practically a requirement for significant channel growth. Tech Data will only distribute endpoints and Mitel’s 5000 platform. The change is impacting the U.S. only; distributors are already used overseas.
Unrelated, but noteworthy, Mitel is also in the distribution business with its DataNet and CommSource division. Mitel announced plans to sell off this division, but has not yet announced a sale.