10 Things VARs Should Know About ShoreTel4:00 PM EST Tue. Aug. 02, 2011
ShoreTel's Champion Partner Conference had the Blues Brothers (well, actually, corporate entertainer Richard Laible as Jake, and ShoreTel regional vice president Mark Swendsen as Elwood), NFL great Joe Theismann, and a whole lot of enthusiasm from more than 600 ShoreTel partners who have thrown their support behind the scrappy UC company.
CRN visited with ShoreTel's top executives and a healthy sampling of the 600-or-so partners that attended the conference, held in late July in Chicago. Here's a look at 10 takeaways on ShoreTel for interested channel observers.
ShoreTel is, as one of its partners described it, the "little UC engine that not only' could,' but can and most definitely 'will.''' ShoreTel returned to profitability in its fiscal third quarter, and has grown revenues 30 percent on a year-over-year basis in every one of the last four quarters. By several analysts' estimates, it lays claim to about 9 percent of the U.S. IP telephony market, and its executives have made no secret of scaling its solutions upmarket to win more enterprise business. Having reworked its channel program and cut ties with a number of underperforming VARs, ShoreTel appears to be doubling down with its most strategic partners. Eric Bowling (right), vice president of sales for IPC Technologies, a Richmond, Va. partner, was among the many ShoreTel partners who talked up ShoreTel's impressive customer satisfaction feedback.
From left to right: Don Girskis, ShoreTel's senior vice president, worldwide sales; Don Gulling, president, Verteks Consulting, an Ocala, Fla.-based partner; Mark Colquhoun, CEO of Solar Communications, a Swindon, U.K.-based partner; and Bowling.
ShoreTel in late 2010 acquired Agito Networks, a move that many ShoreTel partners said they see as a game-changer for the company.
ShoreTel Mobility, as the solution is now known, can extend an enterprise's PBX and UC functions to the mobile edge, and do so in a way that's vendor-agnostic -- meaning a ShoreTel Mobility solution could be sold, for example, into a Cisco-led or Avaya-led infrastructure. ShoreTel Mobility has opened up ShoreTel's channel to partners that, according to Girskis and other ShoreTel executives, wouldn't give the vendor the time of day in the past. One is global integrator Dimension Data, which is one of Cisco's largest global partners but earlier this year signed on as a ShoreTel Mobility partner, too.
ShoreTel earlier this year entered two-tier distribution in the U.S., a move that according to ShoreTel's Girskis (pictured) catalyzed growth among prospective partners here. But as ShoreTel executives noted throughout the show, it's ShoreTel's ambition to make major international inroads as well as grow the U.S. business base.
ShoreTel is now in 48 countries, and according to CEO Peter Blackmore, its Canada- and U.K.-based businesses are growing fastest. The company has designs on India, and other Asia territories where IP telephony and mobility needs are growing rapidly.
Peter Blackmore, who became ShoreTel's CEO in December, is a longtime observer of the channel and a veteran of top executive roles at UTStarcom, Unisys, HP, Compaq and other companies. During a keynote address at the ShoreTel conference, Blackmore articulated why now is no time to take the foot off the gas at ShoreTel: it is in growth mode while many other networking vendors are battling internal problems.
"The whole industry is distracted," Blackmore said. "Eventually competitors will get their act together. Let's not miss out on this opportunity."
ShoreTel is targeting $1 billion a year and 20 percent market share -- ambitious, Blackmore admitted, but as he and ShoreTel's executive team see it, realistic.
Blackmore made it clear to ShoreTel partners that ShoreTel will continue to invest, pledging to triple ShoreTel's current investment in the area of mobility, including research and development. That said, Blackmore also sought to assure partners that ShoreTel wouldn't do anything to slow the company's impressive momentum.
If it ain't broke, Blackmore committed to partners, it won't be 'fixed.'
"We're building momentum, we can sustain that and improve it, and with mobility, we can exceed even our wildest dreams," he said. "It's a really exciting time."
Some of ShoreTel's partners voiced concerns about ShoreTel's growing pains as it adds more partners, but many said ShoreTel was being deliberate in its pace of growth and transparent about the ways in which it will achieve that growth.
"At this point, I think they're doing it just right," said Don Gulling (left), president of Verteks Consulting, an Ocala, Fla.-based solution provider that grew its ShoreTel sales 321 percent year-over-year. "They've been up front and said, 'We need to add more dealers,' and that's totally fair. I mean, we don't want 100 other guys in our area selling the same stuff, but I've been telling dealers forever, if you are nervous because they're signing up another dealer, you're not looking at the big picture. There's a natural curve to these things."
Buck Baker, president of ScanSource Communications, which is one of ShoreTel's two distribution partners in the U.S., said that the overall interest level in ShoreTel products -- especially from non-UC VARs that work with ScanSource in adjacent areas like A/V integration -- has been increasing.
"ShoreTel's been very open and transparent on some of the things they need ScanSource to help them do, and one of those things is recruitment," Baker said. "They're straight-up with us: 'We're this size company today, and we want to get to $1 billion in the coming years.' They have a good sense of what they do well as well as some things they could better, and it's been very refreshing across the board."
If there's one piece of the ShoreTel story that's still leaving VARs a little confused, it's ShoreTel's cloud strategy: a big deal at the 2010 partner conference, but downplayed at this year's event.
Several partners do sell ShoreTel products as-a-service already, but CEO Blackmore said the take-up of hosted solutions among the customers ShoreTel covets has been hard to predict.
"To be fair, it's building very slowly," he said. "It could change and I don't want to miss out on a very natural opportunity if it does."
ShoreTel CMO Kevin Gavin (pictured at left, with MC Richard Laible), later told analysts that hosted solutions from competitors are "not a real competitive threat" to ShoreTel.
Many of ShoreTel's bread-and-butter partners are regional VARs focused on SMB customers. But the company has some key partners in major national solution providers, too -- among them Springfield, Pa.-based Transcend United, which merged with Liquidspoke earlier this year to become one of ShoreTel's biggest national channel partners. "The message loud and clear from Peter has been quality, not quantity. You don't need dealer saturation. When you get quality players, that helps us because we all start to compete in bigger deals," said RIchard Tarity, former LiquidSpoke CEO and now executive vice president of sales at Transcend.
Transcend United was later in the show named ShoreTel's Partner of the Year for the fifth straight year. The solution provider powerhouse was also recognized as a Major Accounts Partner of the Year for 2011, as well as received a ShoreTel 2011 Circle of Excellence Award.
Left to right: ShoreTel's Sam Koury, Don Girskis; Tarity; and ShoreTel's Peter Blackmore.
Former NFL quarterback and two-time Pro Bowler Joe Theismann, now well known as a sportscaster and color analyst, addressed the ShoreTel audience on how teamwork, and the ability of partners to work with ShoreTel in a collaborative fashion, is going to make everybody a winner.
VARs agreed that ShoreTel, which sells 100 percent through the channel, has a whole lot of team-centric tools at its disposal these days.
"They've matured a lot, and they seem to have a much better idea of how they're supposed to grow," said Rick Hirsh, CEO of Transcend United. "There is actually a concept for growth now, and they've articulated how they're supposed to make it fit with us. We're very encouraged by that."