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ShoreTel executives said the company is just months away from launching its long-awaited common communications platform, which will enable customers to access the same services via the cloud or on-premises technology and embrace a true hybrid UC environment.
“The common platform is a very big deal,” Mark Roberts, ShoreTel’s chief marketing officer, told eWEEK. “We’ve spent the better part of the past two years working on this.”
ShoreTel, like many of its competitors, built its business by selling communications hardware that companies installed and deployed within their walls. In early 2012 ShoreTel bought M5 Networks for $146 million, expanding its portfolio to include a cloud-based UC offering.
This gave rise to the common platform, a multi-tenant solution that will give businesses the same experience, applications and code whether they’re using ShoreTel products on their own premises or in the cloud.
“Customers just really wanted to fix their communications,” Roberts said.
The new common platform will enable businesses to deploy the same set of applications and capabilities in on-premises, in the cloud or in a hybrid environment. It also will enable ShoreTel’s 3.5 million on-premises customers to migrate to the cloud at their own pace.
Getting to a hybrid environment will be important to businesses, Roberts said. Workforces are becoming more mobile and employees are bringing their own devices—from smartphones to tablets to laptops—into the work environment. They also are demanding the same ease of use from collaboration solutions that they’re used to from consumer platforms like Skype. They want to communicate at anytime from anywhere and on any device they choose.
As a result, businesses are finding they need a mix of on-premises and cloud UC solutions, Roberts said. A common platform will give businesses a full hybrid solution, he said.
“We saw the need for … one common user experience and one common set of clients,” Roberts added.
The UC market is undergoing a transition brought on by greater worker mobility, the bring-your-own-device (BYOD) trend and the move to the cloud, according to analysts at Markets and Research. In a recent report, the research firm said it expects the global UC market to hit $75.8 billion by 2020, and that it will continue to shift from on-premises systems—which in 2013 made up more than 60 percent of the space—to cloud-based solutions, which are less expensive to deploy and maintain.
Zeus Kerravala, principal analyst with ZK Research said ShoreTel’s common platform will address the growing demand from businesses for greater flexibility in their UC environments. His research found that about 82 percent of companies want some kind of hybrid cloud solution for their communications.
“Not everything is moving to the cloud, and not everything is staying on premises,” Kerravala told eWEEK, adding that with a common platform like ShoreTel’s, “companies can deploy the right tool to their workers.”
ShoreTel Readies Its UC Common Platform for April Launch
Most UC vendors, including market leaders Cisco Systems and Microsoft, have a mix of on-premises and cloud-based solutions, but they tend to be separate offerings, with somewhat different capabilities, Kerravala said. Businesses are looking for hybrid products that give them the same experience whether they’re using on-premises or cloud solutions. Cisco, Microsoft and others are moving in that direction, but ShoreTel will be the first to offer a true common platform, he said.
During a conference call in October to discuss third-quarter financial numbers, ShoreTel CEO Don Joos said development of the common platform—which went into the alpha phase in December—was happening quickly and that it would be launched in April, ahead of schedule. ShoreTel hosts its partner conference that month.
Creating a single experience for both on-premises and cloud customers has held its share of technical hurdles, Roberts said. However, just as challenging was the internal work ShoreTel has had to do training employees to market and sell the new common platform and readying its internal systems for the change.
ShoreTel also is working with channel partners to get them familiar with the common platform and what they can offer to customers.
“It’s not just the product that has to change,” Roberts said.
ShoreTel also will see its revenue streams continue to change. For most of its history, the company was paid upfront for its communications products and services. However, the trend toward the cloud will increase the amount of recurring revenues the company takes in. During the conference call in October, Joos said he expects that ShoreTel will see revenues from hosted services grow rapidly and for that recurring revenue to grab an increasingly larger share of overall revenues. In the third quarter last year, hosted revenues grew 20 percent and recurring revenue jumped 17 percent.
Recurring revenues now account for 39 percent of ShoreTel’s overall revenues, the CEO said.
Kerravala said that going forward, ShoreTel’s challenge will be in sales, marketing ad working with channel partners. . For channel partners, the compensation model and selling a cloud-based offering is different. Partners won’t be selling the cloud, but selling solutions, he said.
“For ShoreTel, it’s not a product issue now,” Kerravala said. “It’s a go-to-market issue.”
Joos said the company has been working both internally and with the channel to get ready for the common platform.
“We will enable our go-to-market teams and channel partners to support a unified toolset in a common support structure regardless of the customers’ choice of deployment model,” he said in October. “Essentially, we are migrating to be a company that is even easier to do business with.”
