News Story

Former UTStarcom Leader Blackmore Takes the Helm of ShoreTel

By Paula Bernier, Executive Editor, IP Communications Magazines  |  February 01, 2011

This article originally appeared in the Feb. 2011 issue of Unified Communications Magazine

ShoreTel recently announced Peter Blackmore (News - Alert) as its president and CEO. He’s already on the job, replacing Don Girskis, ShoreTel’s senior vice president of worldwide sales, who had been acting as interim CEO while the company decided on a new leader.

"Peter brings a wealth of hardware, software, services and channel expertise to ShoreTel," saysGary Daichendt, chairman of the board at ShoreTel. "His track record of successfully scalingtechnology organizations worldwide makes him the right leader to accelerate ShoreTel'sgrowth."

Blackmore previously was president, CEO and a board member at UTStarcom Inc. Prior to that, he served as executive vice president in charge of worldwide sales, marketing and technology at Unisys (News - Alert) Corp. He’s also been an executive vice president for Hewlett-Packard and was a senior manager at Compaq Computer Corp. And he’s on the board of MEMC Electronic Materials (News - Alert) Inc.

As discussed in the October issue of Unified Communications magazine, ShoreTel has been racking up some impressive financial results. For the fourth quarter of its 2010 fiscal year, the company – which sells IP phone systems with built-in unified communications and contact center functionality – had $42.2 million in revenue, a record high.

That was up 14 percent sequentially from the third quarter of fiscal 2010, and 30 percent from the fourth quarter of fiscal year 2009. ShoreTel also increased record gross margins with non-GAAP gross margins, which exclude stock-based compensation charges, at an all-time high of 66.8 percent, up from 64 percent in the year-ago quarter. As of June 30, it had $116 million in cash, cash equivalents and short-term investments, and had generated approximately $1.7 million in cash flow from operations during the quarter.

According to Synergy (News - Alert) Research, ShoreTel grew market share once again in the June quarter to 8.2 percent in the U.S. pure IP market and 5.6 percent of the U.S. IP telephony market. ShoreTel sold approximately 96,000 end user licenses in the quarter, with more than 800 new customers added in that period.

The company is making gains both in the U.S. and abroad by going up market, and winning more and larger contracts.

ShoreTel started out selling to small businesses, but now also has medium and large enterprise users. The target is opportunities involving between 20 and 10,000 users. It recently sold it first contact center in EMEA in excess of 1,000 lines.

International now represents 10 percent of ShoreTel’s business, and that’s growing. The company has seen the best success in Australia and Europe. As part of its most recently reported quarterly financials ShoreTel revealed it had record high international revenues of $5 million – about 12 percent of four quarter total revenues. That represents a 130 percent year-over-year increase.

ShoreTel wins and retains customers by delivering what Kevin Gavin, vice president of marketing, says are simple and straightforward solutions to their unified communications problems.

“The whole notion of brilliant simplicity is what we focus on,” he says.

Some IT shops like to conquer complexity, and Cisco (News - Alert) and Avaya have plenty of challenges awaiting them, says Gavin. But those businesses that seek easy to implement and use UC solutions should consider ShoreTel, he says. To help demonstrate that fact, he adds, the company urges potential customers to talk to existing ShoreTel users.

“We have very, very high customer satisfaction,” Gavin says.

ShoreTel also has a high rate of success when it’s in the bidding process for a new customer, he adds. The company, which relies exclusively on its network of worldwide channel partners to get its products to market, estimates that it wins between 60 and 65 percent of the deals for which it is considered.

Edited by Stefania Viscusi