Boston Celtics, Brooklyn Nets agree on one thing at least – ShoreTel UC

ShoreTel's acquisition of M5 is key to cloud strategy, says CEO
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Judging by the brawl that broke out between the Boston Celtics and Brooklyn Nets on Wednesday, you wouldn't think the two basketball teams have anything in common. But they do. They have the same unified communications (UC) provider--ShoreTel (Nasdaq: SHOR).

The Celtics recently deployed a premise-based ShoreTel UC system, and the Nets deployed a cloud-based ShoreTel UC system when they moved from New Jersey to Brooklyn this year.

Based on the feedback from the teams' top technology execs, the systems are a success, so there is agreement--at least away from the basketball court.

Jay Wessel, vice president of technology for the Celtics, told a gathering of journalists before Wednesday's game that he had been eyeing a ShoreTel system for the organization for a number of years. This year, he finally got the go ahead to replace their legacy Avaya communications system.

"We pretty much changed everything this summer, including the phone system. The ShoreTel system was one of the easiest parts of the renovation. It went as well as we had planned. There were no issues," Wessel said.

The ShoreTel system has been "easy to maintain," Wessel added. "That is a big thing for me, the ease of administration. I don't want to touch the phone system every day and I don't. The phone system should just be there, do its job, and get out of the way."

The Celtics opted for the premise-based UC system because, for Wessel, the phone system is "mission critical," and he wanted to have the equipment where he could have control over it--"feel it, touch it, unplug it, or whatever."

By contrast, the Nets chose to go with a cloud-based UC system. When the Nets decided to move from New Jersey to Brooklyn, they looked into getting a whole new communications system. The team contacted what was then M5 Networks, now ShoreTel's cloud division, ShoreTel Sky.

"We have a small staff… We needed something that was very simple. So we called M5 for help. In three hours, we were up and running. It was turnkey. We've had great luck with it ever since," said Mireille Viau Verna, senior director of information technology for the Nets, at a press event.

Viau Verna explained that the cloud-based UC system helped them weather Hurricane Sandy. She said communications continued to function throughout the storm, which she attributes to "planning and the stability of the system."

She added the franchise was "concerned about call volume. When the team is doing well and the phone system gets slammed, what would happen with call quality? We have had great success with that. We have no regrets about going to a cloud-based system versus a traditional PBX system."

Peter Blackmore, CEO of ShoreTel, explained the rationale for expanding into the cloud-based UC market through the acquisition of M5 earlier this year.

"We had to decide whether to buy a cloud-based UC company or build one. We have lots of talented engineers, so building a cloud PBX wasn't that difficult. What was different about a cloud company is that it is a completely different business model," Blackmore told FierceEnterpriseCommunications.

"What I was convinced about was for us to enter the cloud market, we needed to buy," he said. ShoreTel narrowed the choice down to three companies, and one of them was M5. "A successful cloud company has to have a low churn rate because you get paid on a monthly basis. There is no deferred revenue. Your ability to make money is about holding customers in place… M5 has the lowest churn rate in the industry," he related.  

Blackmore sees the future of UC in the cloud. He cited analysts who are predicting a 30 percent compound annual growth rate (CAGR) for cloud-based UC, while the premise-based business is only expected to sustain a single-digit annual growth rate. By 2015, more than 40 percent of the UC market will be cloud based, he predicted.

"We think that by 2015 or 2016, cloud-based UC will be half of the market. We needed to be as capable in that part of the market as we are in the premise market; otherwise, we are not meeting our customers' requirements," he said.

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