ShoreTel unifies cloud, on-prem programs in major channel program restructuring

The new program is also much simpler than the old, with the number of tiers cut by almost two thirds. The cloud changes won’t impact Canada though – the cloud product still isn’t available here. Canadian partners will find opportunity registration and training changes interesting however.

Heather Tenuto ShoreTel 300

Heather Tenuto, ShoreTel’s VP of worldwide channel programs and sales enablement

SMB-focused unified communications solutions provider ShoreTel has made some significant changes to its channel program. The big ones involve its cloud business, and are a reaction to the growing number of cloud customers, the unification of cloud and on-premise businesses into a single platform, and some partner unhappiness with the cloud program that had been created a year ago as their own practices evolved.

ShoreTel acquired its cloud business when they purchased M5 in 2012. M5 had a direct sales model before acquisition, but they did have a partner component, as between 60-70 per cent of their sales were referred by a partner. Following the acquisition, ShoreTel considered how to best integrate the partner components of the two businesses.

“We were looking to see what reaction and adoption would be like by the onsite partners to the cloud products,” said Heather Tenuto, ShoreTel’s vice president of worldwide channel programs and sales enablement, who came to ShoreTel from M5. “We spent about 12 months betaing with select partners, and then we added a cloud track in 2014.”

The way that this was set up, with the cloud and the onsite businesses separate, was something that many partners preferred.

“Initially the partners liked that it was separate, because many of the onsite partners were new to the cloud and uncertain how far they wanted to go,” Tenuto said. “This let them make a decision depending on whether they liked it. Some also wanted to do the selling on their own, and some wanted to just refer, so we let them choose and the two tracks let them do that.”

Since then, the cloud business has grown significantly. Between ShoreTel’s quarter ending September 2014 and their quarter ending in March 2015, the cloud business (measured by Monthly Recurring Revenue [MRR] sales) increased from 39 per cent to crossing the 50 per cent threshold. Between 2014 and today, Tenuto said that two-thirds of their on-prem partners had added a cloud component to their business. The result was that the two separate tracks became problematic, since it meant partners with both significant on-prem and cloud businesses had to pursue two separate sales quotas.

“Now that the two platforms have come together as well in the ShoreTel Connect platform, it makes sense to bring the two programs together,” Tenuto said. “There are no more double quotas to hit. It all goes to one place.”

Along with consolidating two separate tracks into one, ShoreTel has consolidated the number of tiers, from 11 to 4.

“The 11 tiers were set up that way because the traditional ShoreTel partners were new to the cloud and weren’t sure how much skin they wanted to put in the game,” Tenuto said. “It was a system that needed to be changed, in light of VAR adoption of the cloud and the unified platform. On the cloud side in particular, it was too complicated.”

Tiering in the new system is based on a single unified point-based system which harmonizes the difference between the onsite net billings and cloud MRR sales.

“Before, to decide on your tier, for onsite we looked at net billing and MRR for cloud and each counted towards the separate track,” Tenuto said. “In a single program, those two separate sets of numbers don’t come together mathematically, so we created the points system to compensate.”

On the previous cloud platform, the ability for partners to become involved in the delivery of cloud services was limited, and the two separate tracks tended to force partners to consolidate services in the onsite track. The new ShoreTel Connect platform removes the platform impediment to partners delivering cloud services, and the unified program removes the programmatic disincentive.

“Partners will be able to offer their own services, without having to worry about which quota they have to hit,” Tenuto said.

Other notable changes have also been made to the program – which are especially notable for ShoreTel’s 43 Canadian partners, since ShoreTel’s cloud offering is not yet available in Canada.

Significant changes have been introduced for partner training, because of the new ShoreTel Connect platform. It is modular, and based on a subscription model, where the partner buys a subscription for the certification.

“This reduces the overall cost by about 20 per cent and if a person leaves the company while being trained, the subscription stays with the partner, so they can get another person trained without having to pay again,” Tenuto said. Points rewards have been also been added for certification training above minimum requirements.

Opportunity registration has also had a major overhaul. ShoreTel used to use a process which required a 30 day approval period – which has been dumped.

“We responded to feedback here, and removed the waiting period, so registration approval is an immediate thing now,” Tenuto said. “Partners also said that they wanted more money, so the rewards have been increased by 50 per cent. Tenuto indicated as well that the increased money through the opportunity registration process is not coming from cutting the tier rate compensation – a move some vendors have made in the last year to give more protection to partners.

“The increased compensation from registration does not mean reductions elsewhere,” she said.

Many cloud-only providers don’t provide MDF funds, and ShoreTel’s former cloud track didn’t either, and that has now been changed, with MDF benefits being extended to cloud sales.

“We had nothing there in the past, and with the new program came time to fix that,” Tenuto said.

Cloud commission options have been simplified, so that partners can choose their sales model within a tier. Another enhancement will allow partner names to appear on ShoreTel Connect CLOUD bills.

The new program goes into effect on November 1.