ShoreTel’s Market Blitzkrieg Hits Supply Speed Bump

by Matt Klassen on April 29, 2011

As ShoreTel continues its unstoppable blitzkrieg on the business communication market, it would be wise to remember the trials, tribulations, and ultimate downfall of the German army who first employed the tactic in World War 2.

You see, as the German army swept into Eastern Europe the speed of its advance left its supply lines well behind, ultimately leading to an under-equipped force that was soon defeated. But what, you may ask, does any of this have to do with ShoreTel?

With ShoreTel making explosive inroads into the global Unified Communications market, poaching key Avaya distributors, establishing a solid presence in both Canada and the UK, and marketing itself as the more affordable and intuitive alternative to its expensive and complex competitors, success is coming fast and furious for the California-based vendor, but with news that the disaster in Japan threatens to cut supply lines, all that could soon come to a crashing halt.

To be fair, perhaps things aren’t quite as gloom as what the German’s faced in Russia, but then again, even if they were I wouldn’t expect ShoreTel to tell us. In a recent conference call regarding its latest quarterly profits, company CFO Mike Healy admitted that the disaster in Japan has left the company with gaps in its supply line, and while the company has sufficient inventory to buoy its sales through the summer, come fall other ways of patching the holes will need to be found.

In that regard, Healy went on to say that ShoreTel is already actively looking for solutions, stating that, “For those individual phone parts affected we are using other vendors to fill the supply void in making spot purchases,” to which he added, “I do not expect these actions to have a material negative impact on our gross margin.”

While supply line shortages are nothing in comparison to the Japanese tragedy that caused them, this issue couldn’t have come at a worse time for ShoreTel, as the company has seen steady sequential growth over the past several quarters and is making strong inroads in both the Canadian and British communications markets.

Beyond that, the company is only now starting to become recognized as a potential market leader, with company CEO Peter Blackmore noting a significant increase in brand awareness for his company. While there’s no good time to have supply issues, when potential customers are just starting to recognize ShoreTel as a company on the rise, it certainly wouldn’t want to screw that up now.

For its part, though, ShoreTel continues to assure its customers that despite the supply issue its business as usual, but then again, the Germans were being told that in 1945 with Russia knocking on the Brandenburg Gate in Berlin.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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{ 5 comments… read them below or add one }

Bernard Gutnick May 2, 2011 at 1:14 am

Mr. Klassen,

I am very disappointed with your article. Comparing ShoreTel to the German army is not only unappropriate, but I personally find it to be offensive in nature.

Best wishes.

Guest May 2, 2011 at 2:16 pm

I LOL’d at the fact that nobody else had said anything, as much as I love to read TheTelecomBlog – this one takes the cake, utterly tasteless.

Matt Klassen May 2, 2011 at 2:25 pm

Bernard,

Thanks for the comment. Of course my intent with this piece was never to offend or even make light of the German offensive across Europe in World War 2, knowing full well the lives both taken and sacrificed to preserve our freedom.

The loosely analogous association in this piece is simply an example from history of a fast moving entity that becomes disconnected from its supply lines, and in no way does it approve of the German tactics or underlying philosophy and in no way does it connect ShoreTel to said philosophy.

I do admit that the attached photo does seemingly make light of the situation and I have subsequently removed it.

Thanks again,

Matt Klassen

Bernard Gutnick May 2, 2011 at 2:53 pm

No worries – water under the bridge.
If you ever need any specific information on any ShoreTel product, initiative or otherwise, please feel free to contact me directly.
Bernard Gutnick

Don Hummy May 10, 2011 at 4:58 pm

Ha, great article. I find it quite interesting how Mr. Gutnick found this article to be tasteless stating that it was comparing Shoretel to the Germany army.
It seems to me that Mr. Gutnick only skimmed the article and didn’t actually read it, only wanting to see what his brain told him to see.
This article is well written, and gives a good history lesson, on what can happen if you don’t see all the possible outcomes.
After all, if we don’t learn from our mistakes, history simply repeats itself.
But the best part of this is that Mr. Gutnick works for ShoreTel. It seems to me that he chooses to ignore the past, and quite simply…..can’t read any better than my three year old. If this is the kind of employees ShoreTel employs, then THEY ARE DOOMED.

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