Today's briefing actually addressed two items - MX-ONE and their Q4 earnings, which were announced yesterday. Keeping with my recent blog theme about good news stories, Aastra is definitely another solid example, and it's especially nice to hear about a Canadian success story.
On the earnings front, this is their 47th consecutive profitable quarter - does it really get any better from a company that flies below a lot of people's radar? Sales were $833 million - flat from 2008 - but they're well on target for hitting $1 billion, which is pretty significant for a Canadian telecom company not named Nortel. Similar to the strong numbers reported by Acme Packet last week, Aastra has money in the bank - $117 million - and spent a respectable $82 million on R&D, which is just under 10% of sales. So, they have the means to both continue innovating and make strategic acquisitions as needed - that's a nice combination to have.
With Nortel folding into Avaya, Aastra now becomes one of the four major players in the U.S., along with Cisco and Mitel. This leads us to MX-ONE, and their roadmap to become established now in Canada and enter that select circle up here. Of course, all the vendors have their let's-exploit-Nortel's-demise strategy, and Aastra feels they offer a strong alternative. Aside from being financially stable, they talked about some other core virtues - namely proven technology, a commitment to open standards, and being easy to do business with. I wasn't able to stay the whole morning, but from what I saw, they did a good job backing these claims up.
Between Unified Communications and Contact Center solutions, they feel there's a $2 billion market opporunity in Canada, and following the Nortel saga, the time is right to go after the mid/large enterprise market with MX-ONE. They have a global footprint today with this offering, so there should be a natural appeal for multinational companies with Canadian branch offices. They also stressed their ability to integrate with other PBX vendors, and with their HP ProCurve alliance, they have a solid software-based solution. This plays nicely into their focus on SIP and virtualization, making it easy for deployments to scale and add new IP-based applications. Given how Cisco is crossing into HP's territory these days, the Aastra/HP combination presents a best-of-breed alternative for businesses concerned about vendor lock-in with Cisco.
They also talked about channels, and it's clear their success will weigh heavily on developing the right partner mix. Aastra prefers a more select approach with partners who are either strong in a particular vertical and/or selling against a key competitor. I agree that channels are the name of the game, and with Canada being a greenfield market for MX-ONE, they'll need to pick their partners carefully. Two of them were on hand today - Demarcation Point, and Conpute, and we heard a bit from the latter, who is particularly strong in the education market.
The more I get to know Aastra, the more I like them, and it's great to see a local company become so large and successful. I asked how much MX-ONE drives their top line growth, but didn't get an answer. That's ok. You could argue that their Canadian push will not have much impact in the short term, but if Canada really is a $2 billion market for them, even a 10% share would account for almost 25% of current revenues. Clearly, they've done very well to date without this market, but if they execute well, there's no reason why MX-ONE can't be a big part of helping them get to $1 billion in the next 2-3 years.
Yves Laliberte, EVP kicking things off
Craig Ballard, Technical Sales Manager - reviewing their competitive differentiators
Mark Marshall, VP Enterprise Sales - discussing Aastra's go to market plans
Don Conley, Conpute - the channel perspective