Partners: What Happened To ShoreTel's Cloud Strategy?

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For all the optimism and excitement surrounding last week's ShoreTel Champion Partner Conference in Chicago, one subject was curiously downplayed: ShoreTel's ambition to sell hosted versions of its products through partners.

Both ShoreTel executives and ShoreTel VARs attending the conference told CRN that ShoreTel hasn't quite backed off the idea of more ShoreTel as-a-service sales through partners, especially unified communications sales. ShoreTel CEO Peter Blackmore listed cloud, along with U.S. sales, international sales and mobility, as part of ShoreTel's four-pronged growth strategy. And several partners do sell ShoreTel UC as a managed service already.

But following a lion's share of attention for the potential of ShoreTel sold as a hosted product at last year's partner conference, some ShoreTel partners and industry analysts wondered aloud why ShoreTel appears to have backed off that ambition.

During his keynote presentation, Blackmore described the cloud as both "an opportunity and a threat." In an interview with CRN in Chicago, Blackmore said the take-up of hosted solutions, especially in the midmarket and among larger customers, is 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."

There are several ShoreTel partners already that sell both on-premise and off-premise versions of solutions, Blackmore said, but he and ShoreTel will continue to observe how fast it takes off before insisting more of ShoreTel's channel partners embrace it.

"I'm not sure how much hosted we'll see," he said. "Nobody does."

Several analysts raised the question in a later session with ShoreTel's top brass. Kevin Gavin, ShoreTel's chief marketing officer, acknowledged that hosted services were gaining popularity among small businesses looking to procure more of their IT as an on-demand, cloud computing solution.

But for larger businesses, Gavin said he doesn't see ShoreTel losing deals to hosted IP communications vendors in any significant numbers.

"It's not a real competitive threat. It's not threatening our revenue or our growth," Gavin said.

Don Gulling, president of Verteks Consulting, an Ocala, Fla.-based solution provider and top ShoreTel partner, said he understands ShoreTel's argument that it doesn't make sense to make it a channel-wide priority immediately.

If the company is pushing upmarket and seeing strong gains on its premise-based PBX, UC and CC solutions, Gulling said, an overly-dedicated push toward cloud might distract ShoreTel.

"I think it's just the economics. We can't make enough money and it's a lot of hassle, so you look at, how much hassle is there and how much potential revenue," Gulling said. "We did look at it, but I don't think we're going to see ShoreTel re-invent the wheel here. They have an on-premise SMB platform that works and they're looking to move upmarket, and I think that's the right direction for them."


Next: Was ShoreTel's 2010 Hype Too Soon?

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