After a year of significant changes at ShoreTel -- not least the company's big-bet acquisition of hosted VoIP player M5 Networks this past spring -- ShoreTel partners are applauding the scrappy UC company's ambition. But they caution ShoreTel that the real work is still to come: maintaining growth while aligning channel strategies to help partners attack both on-premise and hosted opportunities.

ShoreTel partners interviewed by CRN this week said that what they hope to hear from ShoreTel during its annual Champions partner conference, kicking off Tuesday in Orlando, is that it has the systems and strategies in place to preserve the momentum it's built over the past two years, which have been the most ambitious in the company's 16-year history.

"I think they have a good understanding of what it's going to take to bring products like that more aggressively to market," said Rick Hirsh, CEO of Transcend United Technologies, a Wayne, Pa.-based solution provider and one of ShoreTel's largest non-telco partners. "Our business is good, not great, but that's because the UC space is good, not great. ShoreTel can at least say they're up in volume and that they're keeping their eye on the ball."

[Related: ShoreTel: Backup Facility Wasn't Ready In Time For Cloud Outage]

"We're very bullish about the future of ShoreTel," said Don Gulling, president of Verteks Consulting, an Ocala, Fla.-based solution provider whose ShoreTel sales have increased 50 percent over the last calendar year. "Mobility has been a great add-on, and we're having success with contact center. There isn't much yet with [cloud services platform] ShoreTel Sky but we've gotten trained and had a couple of at-bats with it. It's clear there's a lot going on with product."

ShoreTel's big moves were both acquisitions: first Agito in 2010, to create ShoreTel Mobility, and then M5 this year.

Both have positioned the company well to seize opportunities in mobile UC and cloud-based communications and compete with bigger UC players like Cisco, Avaya, Microsoft and Siemens Enterprise Communications, all of which are aggressively pushing cloud and mobility strategies through UC partners.

NEXT: ShoreTel's Channel Communication

Transcend United has had success with ShoreTel particularly in the midmarket where it also sells Avaya's UC products, and also with ShoreTel Mobility, which Transcend's Hirsh said ShoreTel has rolled out more aggressively through partners after initially launching it with a direct sales push. Transcend also has pilots out for Sky, the rebranded M5 platform, Hirsh said, and what he'd like to see now is a clearer picture from ShoreTel on how the various platforms will converge and how the channel should approach that.

"Give a road map," he said. "I've got customers, some with 50 sites, manufacturing plants, for example, or retail locations with a few users, or people in their home office. It's spread in all sorts of different work groups so what is the solution from ShoreTel that can work across all of those modalities? That's where ShoreTel has a strong opportunity especially in the midmarket, because they're offering a robust hosted platform and a robust on-premise platform."'

For all the questions that remain about how ShoreTel will do that, solution providers said the company's done a good job communicating with partners this year and getting updates on the cloud integration out at the right pace.

"A day after the acquisition was announced, [ShoreTel CMO] Kevin Gavin got on the phone with the higher-level partners and told us that ShoreTel had done their due diligence, and that the integration and time line was to be determined," Verteks' Gulling said. "They've been open about that this was going to be a slower process and dealing as best they can with the expected impatience from the partners."

Added Gulling: "[ShoreTel CEO] Peter Blackmore said that product quality was going to be the No. 1 priority, and he's shown that they do think that way."

"The thing I am liking -- and it's happening more quickly than I thought it would -- is this discussion of a common road map," said Sheila McGee-Smith, principal analyst with McGee-Smith Analytics. "In the contact center piece, for example, you still have two very distinct offers for the two businesses, hosted and on-premise. But, it sounds like this is coming together more quickly than a lot of people expected."

NEXT: ShoreTel's Growing Pains

As ShoreTel's evolved, there have undoubtedly been growing pains. ShoreTel's size -- it did just shy of $250 million in its fiscal 2012, compared with multibillion dollar UC competitors -- meant using the bulk of its cash to buy M5 for about $146 million. And almost immediately after the acquisition closed came those nagging, expected questions about integration and whether ShoreTel was equipped to handle integrating a cloud business without disrupting its core UC and contact center businesses.

The ShoreTel executive and channel support landscape has also changed since Blackmore took over as CEO in December 2010.

Gone, at least since the last big gathering of ShoreTel partners in July 2011, are Don Girskis, former senior vice president, worldwide sales, Jeff Valentine, who joined ShoreTel as product vice president, Cloud Division following the M5 buy, Tom Hamilton, former senior director, worldwide channel marketing and now at Riverbed, and most recently, Annette Lorenz, senior director, worldwide channel marketing, whom sources told CRN left ShoreTel at the end of October.

Into the mix are Joe Vitalone, who left ShoreTel to take over the top Americas sales job at LifeSize in 2009 and returned to ShoreTel in May as vice president, channel management, and David Petts, a veteran of Nokia, HP and Compaq, who signed on as ShoreTel's new senior vice president, worldwide sales in July.

Petts and Vitalone told CRN in a recent interview that ShoreTel now has the partners it needs and plans to continue to invest in those partners, which now have many more options beyond bread-and-butter, on-premise PBX systems to sell to customers.

"You'll see a lot more 'rifle shot' recruitment rather than broad geographical recruitment," Petts said. "We're seeing investment in ShoreTel from many channel partners, so we want to help them break through to a level where it becomes a sustainable, consistent business for them."

Overall, ShoreTel's net number of partners increased 8 percent from last year, Petts said, but the ShoreTel channel has churned significantly thanks to cuts of underperforming partners and also the recruitment of partners from rival channels, including what Petts described as "disenchanted Avaya partners."

NEXT: ShoreTel's Growing Plans

Vitalone, for his part, has returned to ShoreTel at a particularly important time. His first stretch with the company lasted from 2005 to 2009 and included ShoreTel's 2007 IPO. This time, however, he's running channel management, and after finishing a listening tour with the current mix of ShoreTel partners, decided to start making investments.

One of those, said Vitalone, is the $600,000 ShoreTel pumped into solutions-sale training classes set to take place in Orlando this week, which sold out soon after their announcement. The goal is to provide a deeper-dive technical resource to partners in areas such as ShoreTel Mobility and how to get partners to upset and cross-sell their customers beyond mere sales of premise systems.

"We are now seen as a major player," Vitalone said, when asked about the biggest difference between the ShoreTel of today and the one he left three years earlier. "We have the opportunity to set the table with customers, and we have partners who want to lead with us. Back then, we were third in, and sometimes fourth in as a competitor."

ShoreTel's Petts said the company has undergone another very important change, and that's re-aligning its global sales team. ShoreTel added and also shifted regional account managers so that managers who had 25 partners per account are now more likely to have between seven and 12, he explained.

"That means you can be significantly closer to what's happening at the partner level," Petts said, adding that account managers will be spending more time with partners on their business plans and improving their close rates.

"Partners will have a lot more attention paid to them than they have in the past," added Vitalone. "The larger service provider partners tend to be more needy, so they tend to take more resources, and that was the way it used to be at ShoreTel where the squeaky wheel always got the grease. Now a rep who is used to calling on 30 partners will be calling on seven. That's a big change in attitude."

ShoreTel will also be investing more in cooperative marketing funds and working with partners to spend those dollars more strategically, as well as offering promotional tools like spiffs and making it easier for top-level ShoreTel partners to acquire demo equipment.

"We can't just have spend for spend's sake," Petts said. "There's a lot of stuff in channel marketing fund programs that just doesn't get utilized. It's Joe's [Vitalone's] and my perspective that this is a wasted opportunity to contribute more effectively to the partners."

NEXT: The Promise of ShoreTel Sky

ShoreTel Sky will be a closely watched piece of the ShoreTel portfolio in the next year, as ShoreTel expands distribution of services through the broader base of partners and also releases products specific to the integrated platform, such as the AppFuse application integration product it debuted at Dreamforce in September.

Along with the rollout will come headaches both expected and unexpected, such as last week's ShoreTel Sky outage following Hurricane Sandy's assault on the New York City area.

But partners say ShoreTel's set expectations appropriately.

"Sky does what it's supposed to, does it well, and is available to sell and make margin on today," Verteks' Gulling said. "I don't know that ShoreTel needs to do a lot more to communicate what's next -- it's going as well as can be expected. I'm eager to see the ShoreTel handset integration, how data backup is going to work and all that stuff too. But they're approaching it the right way. This is very different than a premise-based solution sell, and if ShoreTel tried to market it through the channel as just another product, it would fail."

ShoreTel's demonstrated it knows how to attack competitive customer bases by how effectively it's turned Avaya customers, said McGee-Smith, particularly Nortel SMB customers. Dealing with cloud and the hosted communications model is a different animal, but ShoreTel has a platform, a product and a strategy in place.

"I'm not one of these people who thinks the world's going to be 100 percent hosted in five years, but there is steady growth there," McGee-Smith said. "Whoever has first-mover advantage is really going to benefit, and ShoreTel definitely has it."

Some partners said they'd like to see better air cover from ShoreTel when it comes to marketing and positioning Sky.

"They haven't done a great job knocking the socks off of competition in terms of how much better it is. I have to say that's been less than awe-inspiring," said Robert Plessett, managing partner at TeleSwitch, a Miami-based solution provider. "Where I am in Florida, you have a lot of resellers pushing Broadsoft-based services, and [vendors] like Earthlink and 8x8. It's hard to justify that ShoreTel is much better than those, and when you're asking the customer to pay sometimes 30 percent higher, that is hard."

NEXT: Partners Eager For ShoreTel's Next Move

TeleSwitch's Plessett agreed with other VARs that ShoreTel needs to address a potential hybrid solution, what with so many customers interested in the cloud model but not always ready to commit to it fully.

"I'll be eager to see how they're promoting that at the conference," he said. "Hosted is going to be very strong, we think, and become more and more of a trend. I think we have to play in the space. But we also need more from ShoreTel because right now, the [premise] and the hosted business are still two separate organizations. How it works right now is that when we generate an opportunity, we call the Sky guys and they say, OK, let us help you qualify it. That's fine, but there's going to have to be more manpower and we just don't see them out at a national level just yet."

TeleSwitch's ShoreTel sales are up about 30 percent from 2011, and Plessett, like most partners, said that despite quibbles with ShoreTel's strategy, they've proven a good bet. Plessett will be speaking at the Champions conference about how to build a ShoreTel Mobility practice, he said -- one of many expansion opportunities TeleSwitch has successfully realized with its ShoreTel business.

"It's a strong business for us and we've won some significant projects," he said. "This has been one of the most frustrating sales cycles I've seen in recent years, but a large part of what we have won with ShoreTel has been that mobility piece. It's something we're bringing into almost every UC implementation."

PUBLISHED NOV. 6, 2012