I'm out at the ShoreTel Champions conference in San Diego, their partner event. The theme of the event is "Beat Complexity," but the word I think I heard more than any other today is "consideration."
ShoreTel has for several years now been saying that they win a disproportionate share of deals when they get invited to the table--the problem is they are often excluded from the process by customers who have little or no awareness of them. Outgoing CEO John Combs put some numbers on that in his keynote address this morning, saying Shoretel wins 2 of 3 opportunities they're in--but that they only get 3 of 20 opportunities out there.
So how is ShoreTel going to try and get more of those shots at winning the business? One is by making an aggressive push around branding and lead generation, increasing their budget for these from $2.9 million this year to $9 million next year.
Likewise, the talk turned to "consideration rate" when Combs was asked in a subsequent sit-down with analysts about his potential successor. Jim Burton of UCStrategies asked if there was a particular background that ShoreTel is looking for in a new CEO--in other words, someone out of sales, or financial/M&A (Jim pointed out that ShoreTel is sitting on $115 million in cash that it might want to spend.) Combs' response was, given the paramount importance that ShoreTel is placing on consideration rate, marketing and sales backgrounds will weigh heavily in the search process. (It should be noted that Combs just announced his intention to step down last week, so the search process really has barely begun.)
Among the other factors Combs said ShoreTel will look favorably on in the CEO search is a background in international markets. "For us to succeed, we have got to be a global company," he told the analysts.
Getting back to that $115 million in the bank: Combs told the analysts that ShoreTel is not in the market to acquire any peer companies in communications, saying "it just doesn't make sense" to try and merge multiple installed bases, an effort Combs said tends more often than not to simply anger customers who are being affected. Nor would ShoreTel buy a distribution entity, because that would run counter to its 100% indirect-sales model.
The area where Combs said ShoreTel would put money is its Managed Solutions offering, which will launch in pilot August 1, and go GA November 1.
Another area where ShoreTel plans to put a significant chunk of money is product development. Combs said ShoreTel would spend $42 million next year on product design--this for a company with annual revenues of less than $200 million.
Combs said ShoreTel is executing on a plan conceived last year, whose aim was to "invest now to come out of this [economic] storm at full speed." It's the fact that this plan is now in place and under way that persuaded Combs that now is the right time to hand the reins over to a successor, he said.
