ShoreTel Tuesday confirmed it will enter two-tier distribution in the U.S. and Canada, meaning that the unified communications vendor's solution provider partners will be able to source ShoreTel product through one of two distributors.
The move is part of an ongoing channel expansion for ShoreTel, which is also fine-tuning its partner program, aggressively recruiting partners from rival Avaya's sprawling channel, preparing for a year of growth behind Peter Blackmore, its recently appointed CEO, and looking to capitalize on its acquisition of Agito Networks.
It's momentum that Don Girskis, senior vice president of worldwide sales, said will keep ShoreTel on a fast track to take on bigger, more entrenched UC competitors.
"Look at the changes in the marketplace and the ubiquity of smartphones," he said in a recent interview with CRN. "When a company buys a UC system now every CIO is asking, 'How do I integrate my mobile phones?' "
ShoreTel has posted six sequential quarters of revenue growth, and in its most recent quarter reported that revenue was up 31 percent year-over-year. Girskis, who was interim CEO before Blackmore's appointment and following that returned to the senior vice president role, said ShoreTel met with Wall Street analysts a year ago to talk about how to get more aggressive in the market.
North American distributors, he explained, were a logical next step.
"We do not compete with our partners. We do not have a direct-sales organization, and we like that. We plan on keeping that," Girkis said. "Outside of the U.S., we've been using two-step distribution and been happy with our value-added distributor relationships. But within in the U.S., we're coming up on 600 partners. We touch them directly, and we've come to the conclusion that there are distributors out there that could add a lot of value to that partner community."
ShoreTel's distributors in the U.S. will be ScanSource Communications, with which it has had a distribution relationship in Europe for years, and Westcon Group.
According to Girskis, ScanSource Communications' focus will be ShoreTel's smaller, regional VAR partners, and Westcon will primarily handle its service provider customers, including its partnerships with Verizon, AT&T, Qwest and others.
On the ScanSource side, especially, ShoreTel's higher-tiered partners will have a choice of dealing with ShoreTel directly, as they have been, or going through distributors.
"Many prefer to deal with one distributor instead of 15 different manufacturers," Girskis said of partners. "So a lot of them will."
ScanSource Communications is a distributor of ShoreTel products in the EMEA region already and worked with ShoreTel in 2010 for distribution of ShoreTel for IBM Lotus Foundations, a solution set of ShoreTel UC products and IBM Lotus Foundations software specially bundled for SMB customers.
"By and large we're underdistributed. We need to add more channel partners," Girskis said. "There's some markets where we just plain don't have the market share we want. There are other markets where we have decent partner coverage but where we could locate other opportunities. A partner that is strong in wireless LAN, for example, would be an expert in mobile convergence and take advantage of what we have with Agito. Or partners with strong managed services practices or that are strong on a vertical vs. horizontal basis. There are a lot of channel partners like that [with whom] ScanSource has a good relationship."
Buck Baker, president of ScanSource Communications, said VARs view ShoreTel as a solid company and have high regard for its products.
"The reseller base they have is an enthusiastic one. This is a good thing for them and for us," he said. "I think they're doing a good job getting more recognition. People know about Cisco and Avaya/Nortel but ShoreTel is often mixed in with that tier two, or next level down, of vendors. I think they've moved away from that pack and I think this is a bold move."
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