Thoughts From ShoreTel Investor Day

Since the late 90′s I’ve been tracking the shifts in the voice market. For years we’ve discussed the move to VoIP (Voice over Internet Protocol), hosted voice solutions and unified communication.  I recently attended the ShoreTel investor day in San Francisco at AT&T Park to learn more about the evolution of voice as mobile and cloud computing become more prevalent in all markets. ShoreTel recently announced plans to acquire M5, a cloud hosted PBX solution.  ShoreTel CEO, Peter Blackmore, discussed how it became clear that it would take 3-5 years to build a viable hosted model and this led the company to acquire M5. To me, mobile and cloud combined represents the biggest driver of change in the market.  Personally, I believe having a cloud company in its portfolio will allow ShoteTel to understand the changes in the market.

The mobile phone just another access device

Many companies I speak to consider the mobile phone just another access device.  The mobile device, unlike the PC, is a device that seamlessly blends voice and data.  Nobody wanted Unified Communications when it meant you could talk into your PC, nevertheless now that we have smartphones and tablets, UC is more interesting. Yet its' even easier to fail at voice services now than it has been in the past because voice service must deliver the mobile experience not the IP PBX (Private -Automatic- Branch Exchange) experience of old. What do I mean by the mobile experience? It must seamlessly switch between WIFI or cellular without the call dropping. It must enable a way to bypass the user entering a 9 digital access code to enter a teleconference. It must offer voice activation of services. It must be aware of location but as well of cost of communications.  (That is, just because I can make that expensive roaming call over cellular, maybe I shouldn't.)

Pej Roshan, VP of mobility at ShoreTel, gave a compelling demo at the event that highlighted the "mobile experience" with a side-by-side comparison of how a competitor's product handled four-digit dialing when a call needed to switch between networks.  In the competitor's product, the 4 digit call from a mobile phone failed because the call couldn't be completed on WIFI and asked the end user if they'd like to place the call using their iPhone.  If the end user said yes, the call failed again since it only had four digits. In the ShoreTel product demo, the software provided the necessary digits to connect the call on either network without even asking the user which network to use.  It was a seamless experience.  During this may not sound revolutionary, it highlights how simple things can either enhance or ruin the user experience.

Mobile is about understanding context just as:  Where is the user? What networks are available and what will provide the lowest cost call?  Nevertheless also understanding how mobile can impact how the user interacts with your services.  Is the user moving? If so, the system should allow voice commands. If there is excessive noise, the system should auto mute or filter noise.  If the user has a range of devices, it should be easy to port your service across the devices.  Services are no longer tied to devices.  Services follow the user across devices and across locations.  Products that pick up on the nuance of mobility will be successful.

Large revenue stream today

While ShoreTel said mobility isn’t providing a large revenue stream today, I believe that products that understand nuances of mobility and improve the mobile experience will be successful eventually.  The challenge for companies in the voice space is to redesign the voice experience with a mobile first attitude.  What is voice now that we have multiple devices?  How do voice services translate across location boundaries just as home, work, hotel etc?  We learned in the move to IP PBXs that we may have had 5000 features nevertheless they weren't all relevant to replicate in the transition to a new research.  What gets left behind in the move to mobile and cloud services?  What gets added?  I don’t believe the mobile experience is the same as the desk experience and I believe vendors have to fundamentally rethink what their experience should be just to survive in the new world.

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Before founding Lopez Innovation in 2008, I worked at Motorola, IDC, Shiva Corporation, and Forrester Technology. I currently provide analysis on enterprise and B2C mobile strategies. Lopez Innovation offers market research, speaking and strategic consulting services. In the past, I've analyzed carrier network and service strategies, enterprise communications, cable and telco TV as so then as broadband services. You can contact me at mlopez@lopezresearch.com or @maribellopez on Twitter.