Unified communications has evolved from a convenience to an essential business function, underpinning how companies collaborate, innovate and compete in today’s digital landscape. With integrated tools that combine voice, video, messaging and collaboration platforms into one seamless ecosystem, UC solutions have become indispensable for enterprises worldwide.
However, the rapid shift toward cloud-based communications and the fierce competitive environment have created unique challenges for legacy vendors. Financial stability among UC vendors has emerged as a critical factor, as demonstrated by recent high-profile bankruptcies and restructurings.
Legacy Vendors in a Transforming Landscape
Historically, legacy vendors like Avaya and Mitel dominated the UC space with robust on-premises solutions. Their extensive experience and large customer bases once provided a competitive edge. However, as the industry pivoted to cloud-based services, these vendors faced the dual challenge of modernizing their technology while managing significant financial burdens.
The Struggle to Modernize
For many legacy UC providers, transitioning from on-premises solutions to cloud-native architectures required significant investments in technology and human capital. This transformation is expensive and complex, often involving the integration of outdated systems with new digital platforms — a process that one 2020 article described as “hamstringing” remote work. The risk is compounded by the competitive threat from newer, agile players who built their business models entirely on the cloud. While the innovation of cloud-native providers continues to push the envelope on functionality and scalability, legacy vendors find themselves caught between the need to innovate and the constraints imposed by their historical investments in legacy infrastructure.
The Heavy Burden of Debt
One of the most significant challenges facing legacy UC vendors is the weight of accumulated debt. Many of these companies have taken on substantial financial liabilities to finance expansion, acquisitions and the modernization of their product portfolios. While leveraging debt can provide short-term growth opportunities, it also creates vulnerabilities. If market conditions shift or anticipated revenue streams fail to materialize, high debt levels can quickly become unsustainable. This financial strain not only hinders a vendor’s ability to invest in innovation but also increases the risk of bankruptcy, which can have cascading effects on customers and partners alike.
Avaya’s Chapter 11 Filing: a Cautionary Tale
On February 14, 2023, Avaya — a once-dominant force in unified communications — filed for Chapter 11 bankruptcy protection for the second time in less than six years.
The Downward Spiral
Avaya’s financial difficulties were not sudden. Years of heavy debt, coupled with a sluggish transition from on-premises solutions to cloud services, eroded its competitive position. The company’s financial model, heavily reliant on legacy products and some highly unfortunate accounting errors, became increasingly unsustainable in the face of rising competition from cloud-native UC providers. The Chapter 11 filing was a stark acknowledgment of these systemic issues.
Impact on Partners and Customers
The bankruptcy forced Avaya into a rigorous restructuring process, necessitating severe cost-cutting measures and a radical reorientation of its business strategy. While restructuring can provide a pathway to recovery, the immediate fallout is often disruptive. For Avaya’s partners, who had built their own business models around the company’s extensive product portfolio, the uncertainty surrounding Avaya’s future translated into operational risks. Customers, too, were left questioning the long-term viability of the solutions they depended on, with concerns mounting over support quality and product updates.
A Shift in Strategic Focus
In an effort to stabilize its finances, Avaya was forced to narrow its business focus significantly onto its core market: the ultra-large enterprise market. As a result, it’s started to restrict licenses and its core offerings. This is despite it promising to support customers and push people towards its AXP contact center offering during the restructure. Partners and customers alike have found themselves grappling with a more limited set of options, potentially stifling their ability to adapt to evolving communication requirements.
Mitel’s Parallel Journey to Bankruptcy
Mitel’s journey mirrors that of Avaya in many ways. On March 10, 2025, Mitel filed for Chapter 11 bankruptcy protection, underscoring the systemic financial issues plaguing legacy UC vendors. Like Avaya, Mitel was heavily leveraged and burdened with debt, and its struggles were compounded by strategic missteps in its acquisition strategy.
The Impact of Acquisitions on Mitel’s Finances
Mitel’s financial woes can potentially be traced back to two pivotal acquisitions: ShoreTel in 2017 and Unify in October 2023. Both acquisitions were intended to expand Mitel’s technological capabilities and market reach, but they ultimately proved to be detrimental.
ShoreTel: a Misguided Investment
The acquisition of ShoreTel in 2017 was initially seen as a strategic move to acquire more market share and build its UCaaS offering. However, industry analysts soon recognized that ShoreTel’s technology was on the decline, with its systems considered obsolete a few years later in an era dominated by agile, cloud-native solutions. Instead of reinvigorating Mitel’s offerings, the ShoreTel acquisition added layers of complexity, drained resources, and it failed to generate the anticipated returns. This misstep not only strained Mitel’s finances but also eroded confidence in the company’s strategic direction.
This can be seen by its position in the Gartner Magic Quadrant for Unified Communications as a Service. It entered in 2019 off the back of its MiConnect (really rebadged ShoreTel) cloud offering, but it slid down compared to the rest of the market until it dropped out completely just three years later. This led to the company creating a partnership with RingCentral and talking about how it needed to focus on on-prem solutions in 2022.
Unify: an Acquisition That Accelerated Downfall
But just a year later, in October 2023, Mitel’s acquisition of Unify further compounded its financial challenges. Unify was acquired with the hope of strengthening Mitel’s unified communications as a service (UCaaS) portfolio. Yet despite this optimism, Channel Futures reported that one analyst stated that “there are too many moving parts within Mitel for [Unify] to perform well.”
This fear appears to have been well-founded: Unify’s integration did little to alleviate Mitel’s underlying issues and instead likely magnified its financial vulnerabilities — one post-analysis suggested that Unify “required significant investment, further straining liquidity.” Reuters also reported that “Mitel ultimately fell behind other market competitors in driving innovation around video and chat-based collaboration.” the cumulative effect of these two acquisitions appears to have left Mitel overextended, with a debt load so substantial that servicing it became unsustainable, ultimately leading to the Chapter 11 filing.
Systemic Issues and Limited Recovery Prospects
When Mitel emerges from Chapter 11 restructuring, the company’s future will remain fraught with challenges. The legacy systems that once defined its market presence are increasingly seen as liabilities rather than assets. And existing financial commitments will restrict strategic flexibility, limiting the company’s ability to invest in innovation and adapt to a rapidly changing market environment. As a result, even a post-restructuring Mitel faces significant hurdles in reestablishing itself as a competitive player in the UC space.
While some insist that this Chapter 11 poses no additional risk for Mitel, research from the Journal of Applied Economics suggests otherwise. Around 20% of firms that successfully emerge from Chapter 11 refile within three years, and businesses often end up with significantly lower profitability and flexibility. For a technology company in a rapidly changing market, that could ultimately prove a major problem.
Even more tellingly, it has dropped the number of employees from around 4,200 in 2018 to just 2,400 in early 2025. While it states there should be “minimal disruption” to employees, that’s not the same as promising no layoffs.
The Broader Implications for the Unified Communications Industry
The financial instability experienced by Avaya and Mitel is not an isolated phenomenon; it reflects broader trends and challenges within the unified communications industry. As the market continues to evolve, several key themes have emerged:
The Shift to Cloud-Native Solutions
The accelerating transition from on-premises systems to cloud-native UC solutions represents a fundamental change in the industry. Cloud-native vendors, unburdened by legacy infrastructure and heavy debt, have demonstrated an ability to innovate rapidly, offering scalable, flexible and cost-effective solutions that meet the demands of modern businesses. In contrast, legacy vendors struggle to keep pace, hampered by outdated technology and constrained by financial obligations. This shift has not only redefined competitive dynamics but has also raised the stakes for vendor selection, with financial stability emerging as a crucial criterion.
The Perils of Aggressive Leveraging
Both Avaya and Mitel serve as cautionary tales about the dangers of aggressive leveraging. When companies take on too much debt in pursuit of growth — especially in an industry characterized by rapid technological change — the consequences can be severe. High levels of debt limit a company’s ability to invest in research and development, stifle innovation and ultimately leave the company vulnerable to market downturns. This not only affects the vendor but also jeopardizes the operational continuity of the businesses that depend on their solutions.
The Impact on Partnerships and Ecosystems
The financial health of UC vendors has far-reaching implications beyond the vendors themselves. For partners who build complementary services and solutions around these platforms, financial instability can lead to uncertainty and reduced business opportunities. When a vendor faces bankruptcy or undergoes restructuring, partners often bear the brunt of the disruption, facing challenges related to integration, support, and long-term strategic planning. This creates a ripple effect throughout the industry, impacting ecosystems and ultimately reducing the overall quality and reliability of UC solutions available in the market.
The Need for Financial Stability in Vendor Selection
Choosing a financially stable UC vendor is not merely a matter of risk management — it’s a strategic imperative. Financially robust vendors offer several key advantages that directly impact the long-term success of their customers:
Consistent Investment in Innovation
Financially stable companies have the resources and flexibility to invest continuously in research and development. This ongoing investment is crucial for keeping pace with technological advancements and meeting the evolving needs of modern businesses. Vendors that can maintain a steady stream of innovation are more likely to provide products that are competitive, future-proof and capable of driving long-term business growth.
Reliable Customer Support and Business Continuity
A vendor’s financial health is a direct indicator of its ability to offer reliable customer support and maintain uninterrupted service. Financially stable companies are less likely to cut corners on support or delay critical product updates. For organizations that rely on UC solutions for daily operations, knowing that their vendor can weather economic fluctuations and market disruptions provides a significant level of assurance.
Mitigating Risks Associated with Legacy Systems
Legacy UC vendors that have accumulated significant debt often find themselves trapped in a cycle of cost-cutting and diminished innovation. As these companies struggle to service their debt, they may be forced to scale back investments in new technologies and support, leaving their products increasingly outdated. For customers, this means the risk of being locked into a system that cannot keep up with modern communication demands — a risk that is magnified when partnering with financially unstable vendors.
Prioritizing Long-Term Partnerships Over Short-Term Gains
For businesses evaluating UC solutions, the temptation to prioritize short-term cost savings or immediate functionality must be weighed against the long-term risks of partnering with a vendor in financial distress. Stability, reliability and a commitment to ongoing innovation should be the hallmarks of any vendor partnership. Investing in a financially stable vendor is an investment in long-term operational success and resilience.
Looking Ahead: the Future of Unified Communications
As the UC landscape continues to evolve, the lessons learned from the financial challenges of legacy vendors will play a critical role in shaping the future of the industry. Financial stability will remain a key differentiator among vendors, influencing everything from product innovation to customer support and strategic direction. Companies that can balance technological advancement with sound financial management are best positioned to lead the market.
Embracing Cloud-Native Solutions
The shift to cloud-native UC solutions is not merely a trend — it is a fundamental transformation of the industry. Cloud-native vendors have demonstrated that agile, scalable and cost-effective solutions can drive significant improvements in communication efficiency and business productivity. As more companies embrace cloud-native platforms, legacy vendors will face increasing pressure to innovate or risk being left behind.
Strategic Partnerships and Ecosystem Collaboration
Moving forward, successful UC vendors will likely focus on building robust ecosystems and strategic partnerships. Rather than relying solely on acquisitions to fill gaps in their offerings, vendors that invest in collaborative innovation and co-development with trusted partners can create more resilient, integrated solutions. This collaborative approach can help mitigate the risks associated with rapid technological change and provide a more stable foundation for long-term growth.
A Renewed Focus on Financial Health
The financial upheavals experienced by Avaya and Mitel have underscored the need for a renewed focus on financial health within the UC industry. As companies navigate the challenges of modernization and market disruption, maintaining a strong balance sheet will be essential. Vendors that prioritize prudent financial management, invest in sustainable growth and avoid excessive leveraging — like Wildix — will be better positioned to weather future storms and deliver continuous value to their customers.
The Strategic Imperative for Customers
For organizations looking to invest in UC solutions, the message is clear: Prioritize vendor stability and long-term viability. While features, functionality, and cost are important factors in vendor selection, the financial health of the provider is equally critical. A vendor that can demonstrate a track record of consistent innovation, reliable customer support, and prudent financial management is far more likely to deliver on its promises and support your business in the long run.
Building a Resilient Future in Unified Communications
The stories of Avaya and Mitel are not just cautionary tales — they are essential lessons in the importance of financial stability within the unified communications industry. As businesses increasingly depend on UC solutions to drive collaboration and productivity, the choice of vendor becomes a strategic decision that can impact every facet of operations.
Financially stable vendors offer consistent investment in innovation, robust customer support, and the strategic flexibility needed to navigate a rapidly changing market. In contrast, vendors burdened by debt and legacy issues often face significant challenges in maintaining product quality and service reliability. The recent Chapter 11 filings of Avaya and Mitel underscore the risks associated with aggressive leveraging and ill-considered acquisitions, serving as stark reminders of what can happen when financial health is compromised.
As the UC industry continues its transition toward cloud-native solutions, companies must be vigilant in their vendor selection processes. It is no longer enough to assess a vendor solely on the basis of its technological capabilities or pricing models. A deep dive into a vendor’s financial health, debt management practices, and long-term strategic plans is essential for ensuring that your communications infrastructure remains resilient, agile, and future-proof.
For businesses aiming to secure their operational continuity and competitive edge, partnering with a financially stable UC vendor is a strategic imperative. By doing so, you not only safeguard your immediate communications needs but also invest in a foundation that will support ongoing innovation and growth in an ever-evolving digital landscape.
Ultimately, the future of unified communications hinges on the ability of vendors to balance technological innovation with financial prudence. As we move forward, the lessons learned from the experiences of Avaya and Mitel should serve as a guiding light — reminding us that in the world of unified communications, stability is not a luxury, but a necessity.
If you’re looking for a more stable partner, one that’s not heavily leveraged, check out Wildix. We’re a major player in unified communications, appearing in the Gartner Magic Quadrant for four years in a row, and our solutions keep up with industry demands. Learn more about our unified communications solutions here.
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