ShoreTel Champions One Path Forward
May 04, 2015
ShoreTel this week held its Champion One Partner Conference in Orlando. It was the first such event hosted by the company in over two years. A lot has changed during that time – the company, competitive landscape, technology and buyer’s perceptions of UC.
The event was called ShoreTel Champion One Partner Conference. Two key words in the event’s name are significant: “one” and “partner”. In opening keynotes and throughout sessions ShoreTel spokespeople honed in on these two words.
One Company. In the two and a half years since the last Champion Partner Conference, ShoreTel has been very busy internally. It worked diligently to consolidate, integrate and rationalize the overlapping and numerous back end systems and processes that the company operated since its acquisition of hosted UC services provider M5 Networks in 1H 2012. While there remains some tidying up to do, this work was an absolute necessity for ShoreTel’s organizational efficiency and agility.
One Platform. With the M5 acquisition, ShoreTel was devoting development, support, sales, and other resources to two distinct technology platforms, the internally developed ShoreTel premises-based system that has existed since the company’s initial launch in 1998, and the M5 platform that had since been rebranded ShoreTel Sky. As with its operational business support systems, the feasibility of maintaining two distinct platforms was an impediment to its long-term growth aspiration. At the conference, ShoreTel speakers made it clear that convergence of the two platforms, which takes the best of each, is well under way.
One, Two, Three. One, two, three was the catchy tag line used early and often at the event. It embodies ShoreTel forward strategy of offering one platform, two deployment models and three ways to deliver. This model will be based on the upcoming ShoreTel Connect platform, which will be availability in a limited released in August, followed by general availability planned by the end of 2015.
ShoreTel Connect will be available in three delivery and consumption models:
- The premises-based Connect ONSITE system, which will see a number of feature enhancements, a new line of voice switches, improved collaboration applications, security, and other enhancements.
- Connect Cloud will be the new cloud-based hosted platform hosted by ShoreTel and available for resale by partners. It will support the same features and applications as the ONSITE option, including ShoreTel phones a new client interface.
- ShoreTel Connect HYBRID will support a blend of integrated cloud and premises-based configurations, with the initial release supporting basic functionality such as direct extension dialing, point-to-point video calling, common directory and more across locations. Additional hybrid options will be available in 2016.
ShoreTel asked the audience to keep the finer details on pricing, bundles, migration plans and functionality confidential until Connect release 1 debuts in August. That request is an easy one since there was actually a dearth of such details shared with the partners at the conference. The focus was largely on the business, directional strategy and how partners can benefit.
Admittedly, I spent a good part of the conference brooding about the lack of technology details and the confidentiality of those that were shared. I also confess that I thought to myself and aloud in conversations, “What has ShoreTel been doing these last two and a half years”. It felt to me like they are so far behind what others have been doing.
Upon reviewing my notes I’ve had a change of opinion. Merging two companies is no easy feat, especially when existing customers and partners must not be disrupted, and their future requirements must be considered and incorporated into the forward plans. And, during the past two and a half years ShoreTel has been handling its work on both the new and existing fronts quite well.
In the past two years ShoreTel hosted revenues grew 51%. The company now claims 172,000 installed hosted seats. Its premises-based business grew 32%. The company is gaining better visibility in the market, with traffic on its websites tripling. Net cash has increased 136% and cash flow from operations is up 844%. Patents have increased 62%. Commissions paid to channel partners have reached $2 million per quarter and are growing. ShoreTel’s now employs 1,000 people worldwide.
With these efforts the company plans a restart as “ShoreTel 2.0”. It will remain partner-driven in its sales efforts and will be announcing changes to its partner certification and incentive programs. Together, ShoreTel and its channel ecosystem will have a concerted effort on SMB segments, which the company defines as organizations with up to 5,000 users.
There is a lot more information to come when the ShoreTel Connect platform launches this summer. Most of the channel partners I spoke with shared some of the same concerns I have about the roadmap and those new to hosted/cloud services are anxious about moving to more of a recurring revenue stream. However, a majority of them still appeared satisfied with the help and technology ShoreTel was promising them. I was ready to condemn the company last week for moving too slowly. In a number of respects competitors are further ahead, and I’m used to seeing very advanced cloud/CPE/hybrid solutions from competitors that would not be a great fit for ShoreTel’s SMB target segment. Still, ShoreTel has certain things up its sleeve that level the SMB playing field. The company and its partners will be fine as long as delivery is executed as outlined. As I stated in my blog from the 2012 Champion Partner Conference, it appears that once again ShoreTel is delivering what customers and partners are ready for today.
Sixteen + years of experience in enterprise communications markets. Particular expertise in: Competitive and market intelligence, Market trend analysis and forecasting, Solutions development, marketing, sales and service support strategies.