ShoreTel's Next Challenge: Keep Momentum Going

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So many things have gone right for ShoreTel in the past year that the company's next big challenge might be getting out of its own way.

That was the assessment of a range of ShoreTel partners interviewed this week at ShoreTel's Champion Partner Conference in Chicago: relentless enthusiasm for how far ShoreTel has come, but insistence that the scrappy PBX and UC vendor protect its loyal channel partners as it faces inevitable growing pains in the coming years.

ShoreTel returned to profitability in its fiscal third quarter, ended in March, and it has grown revenues not only quarter-over-quarter, but also 30 percent on a year-over-year basis in every one of the last four quarters. By several analyst estimates, it now lays claim to about 9 percent of the U.S. IP telephony market. According to a recent study by Eastern Management Group, ShoreTel was among only four PBX vendors -- Avaya, Cisco and Aastra being the others -- to grow market share in 2010.

ShoreTel's channel gains, too, have been substantial. It reworked its channel program last year to focus on partner specialties as well as sales volume, and it also made a key move earlier in 2011, entering two-tier distribution in the U.S. with ScanSource Communications and Westcon Group.

But VARs have told CRN that ShoreTel's biggest ace in the hole may yet be its mobility play -- a program designed around its acquisition of Agito Networks last fall. About 30 percent of ShoreTel's 900-or-so global partners are qualified to sell ShoreTel Mobility, which is a vendor-agnostic solution, leveraging the Agito platform, that extends an enterprise's PBX and UC functions to the mobile edge.

With all those victories to celebrate, it wasn't surprising at the conference to hear new CEO Peter Blackmore articulate a stay-the-course strategy: if it isn't broken at ShoreTel, why fix it?

"We're gaining every quarter and I do not see anything to stop that momentum," Blackmore told representatives from more than 600 ShoreTel partners attending the show from around the world.

What Blackmore did urge partners to do was get even more aggressive: market ShoreTel behind its "brilliantly simple" mantra and help grow ShoreTel's UC, contact center and mobility market reach while its many competitors, from Cisco and Avaya to Microsoft and Siemens, are, in Blackmore's estimation, distracted.

That's where many solution providers see both potential for ShoreTel, and also concern. As the company continues its upward climb, ShoreTel will continue to add larger and more voluminous partners such as telecom service providers, and also global integrators -- it recently signed Cisco powerhouse Dimension Data, for example, to sell its Mobility platform.

Dave Casey, CEO of Westron Communications, a Carrollton, Texas.-based solution provider, said the more ShoreTel approaches its stated goal of partnering with top Cisco and Avaya partners to take ShoreTel products further into the enterprise, the more it'll have to do to protect its smaller, loyal partners.

"There will be conflict," Casey said, referencing ShoreTel's service provider channel partners and larger integrators. "I'm not competing with Dimension Data on a mobility deal, necessarily. But there'll be questions about how partners are competing for deals that [ShoreTel] is going to have to address."

Next: ShoreTel's Expanding Channel Presence

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