In April, 2001, when Smith returned to Mitel as CEO after a stint at Nortel Networks Inc. at the request of chairman Terry Matthews, digital PBX-related gear accounted over 95 per cent of what the company sold. But, Smith said, it was clear the communications world was evolving to Internet Protocol. In less than four years the bulk of its platforms were IP-based and it had moved out of hardware manufacturing.

Today, company phones that run applications account for 45 per cent of the IP phones the company sells. Its Mitel Applications Suite, which includes unified messaging and audio and Web conferencing capabilities, now runs in VMware virtual environments.

Zeus Kerravala, distinguished research fellow at Yankee Group who covers unified communications, credits Smith with making a lot of good moves such as buying Inter-Tel and virtualizing its applications.

However the company hitched its wagon to Microsoft Corp. and its Office Communications Server platform, "and it never paid off.

"Microsoft never really pushed the voice side of unified communications," Kerravala said. Now, with the upcoming release of OCS 14, the software giant will have its own voice platform.