ShoreTel CEO Has a "Straightforward Strategy"ShoreTel CEO Has a "Straightforward Strategy"

At Interop Las Vegas, Peter Blackmore explains how ShoreTel will continue to stay on its growth path, which calls for channel and international progress, even as the company keeps its edge with its core market in the U.S.

At Interop Las Vegas last week, I had the chance to sit down with ShoreTel's new President and CEO, Peter Blackmore, who took over from John Combs late last year. With not even half a year under his belt, Blackmore is focused on executing on the initiatives that ShoreTel has been talking about for the past 12-24 months: "Keep the customer satisfaction very high, grow the company in a very disciplined way, grow the channel, and expand internationally," was how he put it to me.

"It's a very straightforward strategy," he added.

Sticking to this basic strategy continues to serve the company pretty well, judging from ShoreTel's latest financial report. The company's revenues and stock price are both headed in the right direction, and it is sitting on $100 million in cash.

So let's take those strategy points one by one. For customer satisfaction, Blackmore cited ShoreTel's continued winning streak in benchmarks like the Nemertes Pilot House awards. On a related issue, and one that ShoreTel has talked about a lot in the past year, the company is improving its chances of getting considered for procurements--they've long claimed that their biggest obstacle to winning deals is just getting a seat at the table in the first place. Peter Blackmore claimed that the company wins in 50% of the deals where they're invited to compete, and added that outside surveys have shown that the past year's work is paying off, as ShoreTel has doubled its rate of unaided brand awareness.

As far as growth, ShoreTel isn't just growing organically, but also though acquisition--its first such buy was mobility vendor Agito, whose fixed-mobile convergence product is now rebranded as ShoreTel Mobility. Blackmore emphasized that ShoreTel Mobility is retaining Agito's vendor-neutrality, and that ShoreTel is selling the product into accounts that have Avaya and Cisco core communications platforms.

Given the company's cash reserves, another acquisition would seem feasible, and Blackmore said ShoreTel would do it "if appropriate," but he's not looking at this as a major avenue for ShoreTel to expand. "There's so much opportunity for organic growth," he said.

When it comes to strengthening ShoreTel's channel, Blackmore conceded that the vendor is "hugely underrepresented on the East Coast," and so will make this a key area of focus as it attempts to grow its channel. He said that industry consolidation should make it more attractive for channel partners of other vendors to consider adding or moving to ShoreTel, as they find themselves increasingly having to compete against other channel partners selling the same big-vendor's product. "In our case, it's simply that they see an opportunity," Blackmore said. And for ShoreTel, "The opportunity to gain channel is clearly there."

International is the one area that seems most a work in progress. Blackmore was hired as CEO in part because of his extensive prior experience internationally, as CEO of China-based UTStarcom. He said China was not likely to be an early addition to ShoreTel's market, since, to enter the Chinese market, "we need to do a lot of work." India is likely to be an earlier target, though even there the company lacks "feet on the street" right now; this is liekly to be an initiative for next year.

Blackmore concluded that, "We need to be in the BRIC [Brazil, Russia, India, China] countries," but that right now its key areas of strength internationally are the UK, Canada, Mexico, and Singapore, among others.

ShoreTel used the Interop show to announce its latest release of its core system, ShoreTel 12, as well as Contact Center 7, the latest iteration for that market. ShoreTel 12 doubles the capacity of the platform, fronm 10,000 seats on a single system image, to 20,000 seats; "That's well in excess of 70% of the addressable market," Blackmore noted--though he added that 50-5,000 users remains ShoreTel's (extremely broad) sweet spot.

So from the financial markets and from its new CEO, the message on ShoreTel is simple: Organic growth. You could do a lot worse.