ShoreTel Snags Agito; What Does it Mean for FMC?ShoreTel Snags Agito; What Does it Mean for FMC?

If ShoreTel starts pushing the Agito solution, it will almost certainly get some looks. After that, they’ll still have to succeed where no dual mode solution has.

In a somewhat surprising move, IP PBX vendor ShoreTel acquired dual mode fixed mobile convergence (FMC) supplier Agito Networks and its 17employees in an all-cash transaction valued at $11.4 million. Dual mode FMC solutions have been around for several years and employ mobile handsets that include Wi-Fi and cellular capabilities. If the user is within range of an accessible wireless LAN (WLAN), all of the calls they make or receive are routed over the WLAN. If the user moves out of WLAN range, in-progress calls are seamlessly transitioned to a cellular connection.

I avoid using the term "hand-off" with these systems, because the call remains anchored in the PBX (or an associated mobile controller). When the controller recognizes the user is moving out of Wi-Fi coverage, it places a call to the user's mobile number, a client in the handset answers automatically, and the call is transferred to the cellular connection.

The fundamental appeal of this type of solution is that calls carried over the WLAN are not charged against the user’s plan minutes. As a result, if the user is using their mobile regularly while in Wi-Fi accessible areas, they could see a significant decrease in their cellular charges. Industry estimates have pegged that potential savings at anywhere from 40 to 60%.

With enterprises looking to trim costs, one would think that this kind of a solution would be a no-brainer, however, the idea has been very slow to catch on. Similar systems are sold by DiVitas Networks, Varaha, Comdasys; and IP PBX vendors Aastra and Alcatel Lucent have now integrated this capability in their basic call management systems. RIM has also added a dual-mode capability to their Mobile Voice System (MVS) Release 5, however, that implementation does not feature the automatic hand-off function.

With so much money to be saved and so many ways to do it, why isn't dual mode FMC the hottest ticket in town? I have been watching this market develop (or failing to develop) for the past five years and there are several obstacles:

* "Voice-capable" wireless LANs: The underlying assumption is that the WLAN you have will indeed support voice calls, and correctly or not, many users feel their WLANs are not up to the task (in reality, virtually any WLAN can support some volume of voice calls, the real question is "how many"?). If you ask your WLAN vendor to spec a voice-capable versus a data-capable configuration, the former can be 65% more expensive. In reality, you typically don't need that density of coverage throughout the facility, but most buyers don't get past the panic attack of the initial proposal and drop the idea.

* Clients: To make this magic work, you need a special client on the mobile device. Many of these have been awkward to use, mobile users complain about them, and the potential savings do not justify the whining we have to put with.

* Device/Network Constraints: Many of the early versions did not support BlackBerry, the most popular enterprise smartphone. Agito was actually the first to crack the BlackBerry market and Varaha soon followed. The bigger challenge now is expanding device support to include iPhone and Android, each of which brings its own special challenges. Further, many of the early implementations didn’t support CDMA networks, which eliminated about 60% of the cell phones in the US (CDMA support has since improved).

* Organizational barriers: Probably the biggest (though least discussed) barrier is organizational fiefdoms. In most organizations, Wi-Fi, voice, and cell phones are managed by two or possibly three distinct groups with essentially no incentive to work together. So even if the dual mode solution finds a champion, they’ll be fighting an uphill battle to get it deployed.

Despite all of this baggage, ShoreTel is convinced the time is right for dual mode. In an analysts' call on last Friday, Kevin Gavin, ShoreTel’s VP of Marketing was upbeat about the prospects. After reviewing ShoreTel'’s revenue growth over the past 6-quarters, he shifted to the Agito acquisition and turned the presentation over to Pej Roshan, co-founder and former VP of Marketing for Agito who will now serve as Senior Director- ShoreTel Mobility.

Pej has long been the spokesperson for Agito and he reviewed the value proposition including their support fro BlackBerry and iPhone (with promises of an Android client in the near term). Also featured was Christopher Nowak, Chief Information Officer, Anthony Marano Company, a fruits and vegetables distributor and long-time Agito customer out of Chicago (I've been hearing about this Anthony Marano installation for so long, I should have Mr. Nowak on my Christmas card list).

The company is indeed a major booster for Agito, though Mr. Nowak himself is using the solution with a Nokia E Series phone. While Nokia has become a non-factor in the US smartphone market, they have always had a good voice over Wi-Fi capability and were the first handsets widely supported on dual mode systems.

Conclusion
The big question is, will the combination of ShoreTel and Agito result in a major boost for either party? If the promised collaboration comes off as planned we should see closer integration between the Agito and ShoreTel solutions; in the meantime, ShoreTel intends to continue enhancing its cellular-only mobile Communicator, which they now support on the iPhone. We had similar expectations for the Avaya/DiVitas partnership announced over a year ago.

Even with a better product, dual mode still faces daunting obstacles, not the least of which is getting all of the stakeholders (Wi-Fi, cellular, enterprise voice, business unit managers, etc.) to get on board. Agito says that they will continue to market the solutions in conjunction with other PBX providers’ systems, but I find it hard to believe that anyone wearing an Avaya, Cisco, Siemens, or other PBX hat will be pushing very hard for a ShoreTel add-on. Also most of the those have one or more partnerships in the dual mode space, so it's unlikely the Agito/ShoreTel option is going to pop up in the conversation.

The one thing this deal has going for it is ShoreTel's vaunted marketing capability. If they start pushing the Agito solution, it will almost certainly get some looks. After that, they’ll still have to succeed where no dual mode solution has succeeded before. Mobility is hot, but that heat has failed to light a fire under dual mode.