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ShoreTel Hopes M5 Acquisition Pays off with Hosted Voice Services Launch
ShoreTel announced recently that it had launched the ShoreTel (News - Alert) Hosted Voice Service (SHVS) in Australia. The announcement is the latest event in ShoreTel’s long-term objective to establish a presence in Australia.
In February 2012, ShoreTel made its first significant step in Australia with the acquisition of M5 Networks (News - Alert) Australia in a deal estimated at $160 million. The deal was a classic case of ShoreTel choosing to buy an established solution over building one in house, and came shortly after Gartner (News - Alert) had put M5 in its visionary quadrant for UCaaS in the North American market.
Since the deal, M5 had functioned as a ShoreTel business unit, and in November 2015 launched a hosted solution that eventually became SHVS. If you want to find M5 on the web today, you’ll have to visit archive.org; its web address now redirects to the Australian version of ShoreTel’s website.
The September 2015 version of Gartner’s Magic Quadrant for the global UCaaS market places ShoreTel in the Niche Players quadrant, the weakest of the four possible quadrants, having relatively lower levels of ability to execute and completeness of vision compared to other vendors.
In this Magic Quadrant report, Gartner expressed concern in a couple of areas. One concern was that the majority of customers using the Sky business solution had no more than 50 employees, putting ShoreTel at a disadvantage in larger, enterprise-oriented markets. Another was that ShoreTel’s partner program was so regionalized that it made inter-region deployments difficult.
It would seem that ShoreTel is addressing some of these issues. At the time of the 2012 acquisition, M5’s customer base was made up more of medium businesses in the 50-500 employee range. Although these are not the multinational, Dow 30 type companies that have the deepest of pockets, it does add more variety to the mix of ShoreTel customers.
Gartner’s concerns about the Sky customer base are largely moot, since it is a legacy product and the M5 acquisition allows ShoreTel to offer a newer communications solution. It’s somewhat like criticizing GM for poor quality in its Pontiac and Oldsmobile divisions. We’ll have a better idea of how well ShoreTel stacks up once SHVS gets some mileage, but at the very least, ShoreTel seems to have implemented a long term strategy that makes sense.
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