Shoretel Rumors

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Randy Savicky
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Shoretel Rumors

SHORETEL UPDATE: 4/24/09

Could it be - with ShoreTel continuing to provide PBX solutions - that the rumors I reported about them nearly a year ago were false? Is it now clear that Rich's sources that sparked this article were wrong?

Shoretel seems to be going strong. In fact, while this article was written a long time ago, but thanks to its high ranking on search engines, it still sparks the occasional new comment from avid Shoretel fans.

You can read the comments below for other people's thoughts. There are many avid fans of the Shoretel platform that have come to Shoretel's defense. Any time I see such rabid & loyal support behind a company it usually means the company is doing well. Look at Apple or even Asterisk, which is in the same industry as Shoretel. Both Asterisk and Shoretel appear to have a very loyal fan base. You could get into the whole open source vs. closed source debate, but thats a whole other article. Besides, both Apple & Microsoft are closed source and very successful. The key is to interoperate with industry standards, which pretty much all IP-PBXs do these days thanks to SIP. That enables buyers to simply look for the best features at the best price and with the best support, while weighing which elements are most important.

I'm leaving the article as-is below so you have the context:


ShoreTelI'm reticent to spread rumors about a VoIP company's demise - I certainly don't want to be be the Valleywag of VoIP blogs. However, Rich Tehrani, my boss, has been hearing rumors about ShoreTel and it doesn't sound good. It goes without saying that Rich Tehrani has his "ear to the ground" in the VoIP industry perhaps more than anyone - myself included. Rich heard things about TMC's main competitor long before the story broke out in the blogosphere, but both Rich and the TMC team took the "high road" and chose not to write damaging stories about our competitor.

With this in mind, Rich wrote in his blog, "I have never heard the kind of rumors about a vendor that I am hearing about Shoretel. Reports of unhappiness in the ranks of the workers and management problems persist in the industry."

Rich adds, "I normally hate to talk about rumors without doing more research than this but in my experience this level of negativity is unusual for any company and for it to come out of the blue and unsolicited from multiple sources means there could likely be fire causing the smoke."

Greg Galitzine also weighs in when he writes, "In my opinion these guys were once the truest darlings of the VoIP world. Maybe I was simply a sucker for a great desk set (and they had some nice hardware, I tell you) but in the wake of all the sour news in the VoIP world I have to wonder if the old adage "where there's smoke, there's fire" applies."

Greg adds, "Shoretel stock (SHOR) was down 10.10 percent on Wednesday, but appeared to be making a huge run in aftermarket trading, bouncing back about 8.5% at 6:50 pm ET."

ShoreTel is one of the early IP-PBX pioneers and they have some really great technology. I for one would be sad to hear if the rumors of their demise are indeed true. While it could be fun for me to speculate that pressure from low-cost IP-PBX solutions, especially Asterisk, the open source IP-PBX is affecting ShoreTel, I don't think this is the case. The last time I looked at ShoreTel, their technology was more scalable than any of the Asterisk-based solutions out there. Asterisk's sweet-spot is really under 80 seats (some exceptions excluded) where as ShoreTel's sweet spot is 80 seats and up. ShoreTel competes more with Cisco, Nortel, and Avaya.

So why is ShoreTel having problems? As Rich wrote in July 2007, "ShoreTel hit it big with an IPO which jumped 27.5% on it's opening day. The IPO was derailed last week as a result of a lawsuit filed by Mitel. The company closed the day at $12.15, after the company priced 7.9 million shares at $9.50 a share." So perhaps Mitel's lawsuit against ShoreTel took the steam out of ShoreTel?

Perhaps all the recent lawsuits against various VoIP companies, including Vonage, which has lawsuits filed against them by Verizon, Sprint Nextel, Nortel, and even me over my cold pizza has stymied ShoreTel?


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