Up Next: ShoreTel

Today is the start of ShoreTel’s Industry Analyst and Consultant Conference. It should be very interesting. Last year, I took away two very clear messages about ShoreTel:

1. They are 100% channel (and scoffed at their competitors that compete with their partners).
2. They are “Brilliantly Simple” – no need to overcomplicate things.

Both of those messages need refinement. First off, since the firm acquired M5 (now named ShoreTel Sky) they acquired a direct sales model. ShoreTel Sky sells direct, and since ShoreTel is encouraging its existing partners to resell Sky – that means ShoreTel is competing with its partners. Is that why premise system sales from its service provider partners dropped to 9 percent recently?

To be fair, the cloud is a different model, and direct sales are far more common. Also, the smart money says not to make big sudden changes on an acquisition until learning the new business. It will be interesting to see how this sorts itself out. I don’t think it’s a big deal yet, but it could fester into something.

For example, M5 currently uses Cisco phones. ShoreTel intends to change that in 2013. It isn’t clear how, but it probably means Sky customers will soon use ShoreTel phones. Does that mean end users will be able to directly purchase phones? Or, perhaps it means that Sky will soon only be available from dealers?

Regarding simplicity, there are two issues. First, ShoreTel’s solution portfolio is growing – ShoreTel Mobility, ShoreTel premises, and ShoreTel Sky have different channels. ShoreTel supports Polycom video, soft clients, hard phones, mobile clients, wireless solutions, collaboration, presence, etc. I need to check my math, but I’d say the portfolio has doubled in the past few years. Does that equate to increased complexity? The other issue is competitors seem to have caught wind that the pitching simplicity resonates, and many are attempting to emulate it. Several new systems on the market are playing-up that tune.

So I will be looking for clarity in their messaging. Whatever they are doing, though, seems to be working. The company just reported its quarterly results which grew revenue 39 percent from last year. That’s impressive in general, but even more so when considering recent bold changes: a new CEO, a new VP of Sales, new acquisitions. Any one of those changes could have derailed growth.

UCStrategies will have three at the conference, myself, Blair, and Jon. 

1 Responses to "Up Next: ShoreTel" - Add Yours

Art Rosenberg 11/8/2012 2:31:56 PM

I think a key point you highlighted about ShoreTel's move into "cloud" -based services, is about the marketing strategies involved, i.e., direct or via partner channels. If through partner channels, who will they be, wireless carriers, UC resellers (hardware/software) or the new breed of customized Solution Integrators that can handle all the application complexities of mobile, multi-modal BYOD end users and next-generation mobile Interaction Centers?

Look forward to hearing more about their directions and strategic migrations from traditional, premise-based telephony.