ShoreTel and Avaya: A Tale of Two Conferences
ShoreTel and Avaya are quickly moving into each other's space.
I attended two analyst events--Avaya's and ShoreTel's--in the past two weeks: Both events were attached to the vendors' larger partner conference, allowing analysts to attend some of the general sessions aimed at the partners, with specialized sessions and breakouts aimed at the analysts.
Avaya's event wasn't its regular analyst conference, but they invited a handful of analysts to their Americas Executive Partner Forum in Cancun, while ShoreTel held its annual analyst conference in conjunction with its partner event in Orlando, and invited consultants for the first time as well.
ShoreTel's theme was for partners to address the whole market, with both cloud and premises offerings. Avaya's theme was to go for the mid-market. ShoreTel and Avaya are quickly moving into each other's space.
ShoreTel, primarily known for offering a solution aimed at mid-sized organizations, is expanding up-market, focusing on larger deployments. On the other hand, Avaya, which has its strength in large and very large enterprises, is now focusing on the mid-market and moving down market.
Avaya's two key products, Avaya Aura (Avaya Aura Communication Manager) and IP Office, have traditionally been aimed at two different markets. Avaya notes that Avaya Aura is aimed at "established businesses seeking cost-effective consolidation of assets and streamlined growth," while IP Office targets "small to midsize businesses seeking cost effective growth and built-in value."
In mid-2012, Avaya increased the scale of IP Office from 250 up to 1,000 users, making it a more attractive offering for mid-sized companies, rather than just SMBs. As Avaya Aura and Communication Manager are relatively complex solutions, it's not always easy for partners to sell them into the mid-market, and by expanding IP Office to 1,000 users, Avaya's partners have an easier product to sell for this segment.
Speaker after speaker told the partner audience to focus on selling IP Office to the mid-market. Tom Mitchell, Avaya Senior VP & President, Avaya Go-to-Market, told the channel partner audience to "go where the growth is," and to focus on the key growth areas, including branch networking, video (Radvision), and IP Office. IP Office experienced 46% quarter over quarter growth, and sales were up 100% year over year. Mitchell told the partners that by taking share of the mid-market, the partners can grow their business.
Mitchell noted that much of Avaya's business is based on its legacy business, which will provide challenges to partners, as a lot of this business is with financial customers and is not a high growth market. On the other hand, the mid-market and new markets, while only 30% of Avaya's business today, provide a greater opportunity. Mitchell's advice to partners is to "hunt new customers, don't rely on the slow-growing base," and balance a long enterprise sales cycle with mid-market transactions.
Avaya is clearly going after ShoreTel's core base, and Avaya's partners will need to "go toe to toe" with companies like ShoreTel.
For its part, ShoreTel is taking direct aim at Avaya (and Cisco), especially as it moves upstream into larger deployments. David Petts, Senior VP Worldwide Sales, noted that ShoreTel is getting many more government deals, and has nearly doubled the number of large wins of over 1,000 seats in the past year. Don Joos, Senior VP, Business Operations noted that ShoreTel is "tightening up support for the larger end of the product sweet spot." This includes enhancing the product line with capabilities such as video, and making virtualization a core part of what the company does going forward.
ShoreTel acknowledges that expanding its product line and moving upmarket won't necessarily be easy. As Pej Roshan, VP of Product Management noted, "Choice is the new brilliantly simple [ShoreTel's longtime tagline], but choice can breed complexity. ShoreTel's challenge is about making choice simple." While still focusing on its theme of "Brilliant Simplicity," ShoreTel is encouraging customers to go rogue and "Say no to status quo, say yes to ShoreTel."
ShoreTel is also making a more aggressive play into Avaya's stronghold--the contact center. ShoreTel's Enterprise Contact Center revenue was up 22% in FY 2012, and ShoreTel noted that the contact center is playing a strategic role in driving wins in large opportunities.
One of the key differences between the two conferences was the focus on the cloud. While Avaya discussed the cloud and its offerings, cloud wasn't the key theme of the event. ShoreTel, on the other hand, was all about cloud, and Dan Hoffman, President, Cloud Division, said that by 2015, 42% of the market will be hosted.
Hoffman spent some time describing ShoreTel's new partner programs for cloud services, identifying how ShoreTel partners can participate in selling ShoreTel Sky, the company's cloud offering. There were several sessions emphasizing the importance of the cloud and the strategic advantage ShoreTel has in this area with ShoreTel Sky.
The biggest similarity in the two events was the enthusiasm of the channel partners. The partners I spoke with at both events were very pleased with what they heard from the leadership and executives, and are optimistic about their future success. This was especially evident at Avaya, where partners were more excited than I've seen them in years. ShoreTel's partners were very excited about the ability to offer a variety of solutions to meet their customers' needs--whether cloud or premise--and not having to turn away customers looking for a cloud-based solution.
Both events were worthwhile and informative--and it doesn't hurt to be in a nice warm climate!