Aastra MX-ONE's Canadian Push Continues

Last month, I attended a briefing for Aastra's launch of MX-ONE in Canada. I know it seems strange that a Canadian vendor is just now bringing this solution to the home market, but things are a bit different up here. We don't get a lot of firsts, but we're still #1 in hockey, and hey, Canada won more gold medals than anybody in Vancouver - nothing wrong with that.

Anyhow, I don't have much news for you, but earlier this week I came back to visit Aastra for part 2. This time I got a full demo of MX-ONE, which is their enterprise class offering. As with all the telecom vendors, MX-ONE is much more than an IP PBX. It's full of all the requisite features to support Unified Communications and contact center applications. They showed me lots of multimedia examples, including wireless handoffs, calendaring integration and presence.

Not being an IT guy, this was nice to see, but I found the go-to-market, value proposition conversations more interesting. Probably the most important takeaway here builds on what we heard at the analyst briefing. Namely, their close working relationship with HP, and how MX-ONE offers a versatile and complete alternative to Cisco, as well as Avaya/Nortel. Those are really the major players that Aastra is up against, especially in terms of building their channels. Of course, there is Mitel, Shoretel, etc., but for MX-ONE in particular, they're aiming pretty high.

While the technology appears to be solid, and I'm sure the pricing is attractive, Aastra's biggest challenge will likely be brand recognition. I've long contended Aastra is the best kept secret in this space, and seems typical in so many ways of successful Canadian companies that don't get much attention elsewhere. This is especially strange for Aastra considering they are a profitable public company, rapidly closing in on $1 billion in sales. I don't know how you keep this under the radar much longer, but I don't need that external validation to know that Aastra has a good thing going here.

Just a couple of photos from my visit...

Aastra MX-ONE Comes to Canada

This may seem like a strange headline, considering that Aastra is a Canadian company. However, that's the news that we got updated on at today's analyst briefing at their HQ just outside of Toronto. MX-ONE is Aastra's mid/large enterprise offering, and comes out of an acquisition from Ericsson. I commented on this briefly in a recent writeup on the UC Strategies portal.

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

Aastra - Another Canadian Bright Light

Following my post the other day about MTS Allstream, I wanted to highlight another Canadian company that's on a roll these days. That company is Aastra, and I've blogged about them in the past. This is a company that has slowly built up a strong position in the IP telephony market, via both organic growth and a series of acquisitions, particularly in Europe. Aastra is one of a handful of Canadian telecom players that is publicly-traded and truly has a global reach. I know, this sounds a lot like another Canadian company that used to be a stock market darling, and if the truth be known, among Canadian telecom equipment vendors, I think Aastra is now poised to be what Nortel used to be.

Furthermore, their stock has held up well relative to other tech stocks, with a strong bounceback that has shares trading higher now than before the markets crashed last year. Much of this rides on their Q1 results which came out about 2 weeks ago. Sales took a big hit - down 16% - compared to Q4 2008, but more importantly, they're 56% higher than Q1 a year ago. Add to that rising gross margins, a sustained commitment to R&D, very little debt, and manageable operational expenses, and you have the making of a good growth story.

On the product front, they continue to innovate, and I think that has a lot to do with their success. It's hard to compete directly with the Polycoms, Avayas and Ciscos of the world, but they keep finding ways to add value to their lineup of SIP-based phones. One example is AastraLink RP, which integrates with Microsoft's Response Point, and won a 2008 TMC Product of the Year Award. Another would be ViPr, their touch screen videoconferencing solution which works with most any existing PBX. These are recent examples of how they're attacking specific niches and applications, and have many others in the mix, including Unified Communications, mobility and contact centers.

All told, there's a lot to like about Aastra, and in true Canadian style, they're doing it quietly but effectively. They should be familiar to many of my readers, but maybe not familiar enough, and with the flag-waving I'm doing this week, hopefully that will change now for the better.