ShoreTel Merges Cloud, Onsite Sales Into One Tiering Program

Ellen Muraskin**Editor’s Note: Click here for a list of August’s important channel-program changes you should know.**

IP phone system vendor ShoreTel has now had three years to consider the impact of cloud on its business model and channel program, ever since acquiring hosted PBX provider M5 back in 2012.

ShoreTel particularly has listened to channel partners, who produce 96 percent of the company’s revenue. The end result: major revisions to the company’s Champion Channel Partner program, launching today.

ShoreTel is changing its reward model in a way that:

  • encourages resellers who prefer selling cloud to keep selling cloud, those who prefer selling onsite installations to keep selling onsite, both to sell hybrid, and customers looking for any of the above to stay with their current partner;
  • feeds both kinds of sales into the same tiering system;
  • keeps partners front and center in their customers’ sights; and
  • encourages investment in training.

Until now, ShoreTel’s cloud and on-premises installations were sold as two separate commitments and quotas, says Heather Tenuto, ShoreTel’s vice president of worldwide channel programs and sales enablement. Adding sales for one model could delay rewards for the other.  ShoreTel's Heather Tenuto

Starting now, ShoreTel is moving toward a point system that allows both types of sales to feed into the same tiering system.

“In the past, we measured monthly recurring revenue (MRR) towards cloud, and net billing towards onsite,” said Tenuto. “Now we’ve joined the two programs together, and count points.” 

Channel partners accrue one point for every $10 in MRR or for every $500 in net billing; it all goes into the same pot.

“Onsite partners don’t have to sell cloud; their tier stays the same as last year’s program. If they do take on cloud, they have an extended opportunity to get to the next tier,” said Tenuto. Among cloud customers, 80 percent lease their ShoreTel desktop phones as well, contributing to the reseller’s MRR.

There’s also a third way to accrue points: In an effort to encourage training on its new Connect hybrid cloud-and-onsite solution announced in August, ShoreTel is awarding partners up to 15 percent of the points toward a target through training. Points are awarded for taking classes above certification requirements at each level. Training itself is changing, moving to a subscription-based, “Academy” model that stays with the channel organization, not the individual. A two-year subscription includes all updates and access to all online training modules.

“Business owners like this, because if someone leaves, someone else can …

… take the training over, even from the beginning,” says Tenuto, “as long as it’s within the two years.”

Cobranding on Monthly Bills

Shoretel is addressing another cloud concern by keeping resellers’ names on monthly bills, if they so desire.

“People were used to hands-on,” said Tenuto. “Now we keep them more involved in the implementation.” If partners want customers to call them first, they can also retain first-tier support, with access to ShoreTel’s BOSS service portal so they can control the account and make moves, adds and changes.

While Shoretel isn’t penalizing partners who want to stick to on-site sales, the handwriting would appear to be on the wall. The company is now receiving a little over half its revenue via cloud. They expect that to grow that to two thirds.  Also, once you go cloud you apparently never go back; two-thirds of their channel partners have adopted cloud, and perhaps one or two have gone the other way. ShoreTel’s Connect hybrid solution gives customers an opportunity to get used to UCaaS – and additional features as well as users – without fear of commitment or losing their on-site investment.

“ShoreTel stays above market in selling onsite,” said Tenuto, “We think because people know an investment in ShoreTel will play out. We’re in line with the market on cloud.”

ShoreTel is also introducing market development funds (MDF) for cloud sales for the first time. And to encourage resellers to register their opportunities, they have upped opportunity registration rewards from 8 to 12 percent for those deals, and eliminated the 30-day waiting period.

Resellers will also see changes made to the partner portal, effective Nov. 1. The site will track points, and will also show lead and opportunity registration and MDF.

ShoreTel has 740 U.S. partners, 150 of which came on board with the M5 acquisition. Worldwide, they number 1,175.

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