THE NORTEL FALLOUT CONTINUES!

Nortel’s liquidation could cripple UC relationship with Microsoft
Nortel’s products, engineers, consulting could disappear
By John Fontana , Network World , 06/24/2009
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Nortel’s liquidation of its assets could possibly gut the 3-year-old unified communications partnership the company has with Microsoft.

The pair forged a relationship in 2006 that resulted in what they called the Innovative Communications Alliance (ICA), a plan to jointly develop, sell and roll out UC and VoIP technology to corporate customers over a four-year period.

The Compelling Case for Video Telephony in UC: Download nowNortel was bringing to the table its telecom background, middleware product set and install base while Microsoft was taking a software approach to voice anchored by its Office Communications Server (OCS).

The partnership, which has already delivered some tangible product integrations, is slated to end in 2010 and current developments may signal its permanent demise.

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View more related contentGet Daily News by Email”Bankruptcy does not mean going out of business, but Nortel is fighting for its life,” Zeus Kerravala, an analyst with the Yankee Group, told Network World in January.

Nortel’s asset liquidation could eliminate from the partnership Nortel’s telecom products, including its IP-PBX platform, the Nortel engineers working with Microsoft on jointly developed products, and Nortel Global Services, the consulting arm that provides glue for ICA.

The consequences of such a collapse can be summed up in comments by Nortel CEO Mike Zafirovski at the 2006 partnership unveiling when he called the deal an opportunity to create $1 billion in revenue.

That prediction has not come to fruition, and by 2008 Nortel was reporting a $3.4 million loss and company officials were unwilling to discuss the Microsoft partnership in terms of earnings.

By January 2009, Microsoft would only say it was waiting for more information before it could evaluate the fallout from Nortel’s bankruptcy filing. On Tuesday, as Nortel was working to liquidate its assets, Craig Schuman, director of business development and strategy for the unified communications group at Microsoft, said: “Both Microsoft and Nortel remain fully committed to delivering customers the best unified communications solutions available. We are not in the position to assess the impact to the ICA until we understand Nortel.s plans for its enterprise division.”

But Nortel’s plans are clear now with the company liquidating and hoping to restructure under Chapter 11.
Gone could be its enterprise business, which Zafirovski has said is on the block. Canada’s Globe and Mail is reporting that

 
 

Nortel is close to selling the division to Avaya for $500 million. That deal would include the UC equipment that is critical to ICA.

Want to compare convergence and VoIP products? Visit the IT Product Guides now.Given the overlap in product sets between the two competitors and the fact that Microsoft has an existing UC partnership with Avaya, such a deal could spell the end of integration work or joint development under ICA. Those efforts might shift to Avaya products depending on what, if any, Nortel products survive the acquisition.

Another blow could come as competitors, including Microsoft, jump at the chance to steal Nortel’s VoIP customers, its largest install base.

The final straw could be the sale of Nortel’s Global Services. While it has not been mentioned specifically by Zafirovski, observers say it appears Nortel has everything on the table.

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THIS IS GETTING JUICY, SINCE MICROSOFT NEEDS A UNDERLYING SYSTEM TO DELIVER THEIR UC IT WILL BE INTERESTING TO WATCH WHAT HAPPENS.

CARVE THE TURKEY, NORTEL, UP BOYS!

  
Avaya reportedly offering $500M for Nortel enterprise biz
If Avaya pulls out, Siemens Enterprise Communications could emerge as a buyer.
By Jim Duffy , Network World , 06/23/2009
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Nortel is reportedly close to selling its enterprise division to Avaya for $500 million.

According to an article in Canada’s Globe and Mail this week, Avaya has emerged as the “favored bidder” for Nortel’s Enterprise Solutions group, which develops and markets the company’s switches, routers and telephony gear to businesses. Nortel is looking to sell off most or all of its assets, having apparently failed in a bid to emerge from bankruptcy as a viable competitor in data networking and telecom.

How Rich Internet Application Technologies Enable Business Banking Client Relationships: Download nowRead about Nortel’s relationship with Microsoft. 

Nokia Siemens just acquired Nortel’s CDMA and LTE wireless businesses for $650 million. Nortel has said it is in advanced negotiations to sell other company assets.

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View more related contentGet Daily News by EmailNortel’s enterprise business has been declining rapidly. The unit generated about $395 million in sales in the first quarter of 2009, down 41% from a year ago, 34% from Q4, 2008, and less than half of the $806 million recorded for the fourth quarter of 2006.

“If executed, Avaya will become a larger player in the enterprise market – a top 4 player in Layer 2-3 Ethernet switching and the largest VoIP player with roughly 25% market share,” states Oppenheimer & Co. analyst Ittai Kidron in a bulletin on the reported Avaya bid. “This could either push privately held Avaya to continue to acquire smaller players to round out its enterprise portfolio and further consolidate market share or position itself as a more attractive acquisition target.”
Cisco and Juniper are likely to aggressively poach Nortel’s switching customers, Kidron states, and Avaya’s partnerships with Juniper and Extreme Networks may be impacted as well.

If Avaya pulls out, Siemens Enterprise Communications could emerge as a buyer for Nortel’s enterprise group, the Globe and Mail report states. Nortel has also drawn the interest of nine companies for its Metro Ethernet business, according to the report.

Nortel filed for bankruptcy early this year as its attempt to recover from a 2004 accounting scandal and a shortfall in demand took an enormous financial toll on the company. That, coupled with the overall global economic downturn, forced the company to ultimately break it self up, analysts say.

 HERE WE GO THE LAST GASP FOR NORTEL. I DONT THINK IT WILL MATTER WHAT AVAYA AND/OR SIEMENS DOES THEY ARE NO DIFFERENT THAN NORTEL, HYBRID PBX’S IN A VOIP WORLD. FUN TO WATCH THOUGH.

NORTEL DISSAPEARING?

 
Nortel had little choice but to liquidate, analysts say
Sale of wireless business for $650M seen setting stage for end of an era
By Jim Duffy , Network World , 06/22/2009
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In light of the overall economy and Nortel’s particular situation, the former telecom giant had little choice but to liquidate its assets as it attempts to restructure under Chapter 11, analysts say.

Watch a slideshow of Nortel over the years.

Nortel this week said it will sell its CDMA and LTE wireless business to Nokia Siemens Networks for $650 million. Nortel also said it is seeking buyers for the rest of the company’s operations – enterprise, optical and Metro Ethernet among them.
Nortel is also delisting its shares from the Toronto Stock Exchange. In essence, the company, after 100-plus years as Canada’s foremost telecommunications equipment manufacturer and at one time valued at over $200 billion, is exiting the arena.

“The global financial crisis and recession compounded our challenges and impacted our ability to complete our transformation,” Nortel CEO Mike Zafirovski told the Canadian parliamentary finance commission last week, according to the Wall Street Journal.

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View more related contentGet Daily News by EmailAnalysts say Nortel had no choice but to follow this course.

“Nortel’s plan to sell all of its divisions, including enterprise, is the right one,” says Steve Schuchart of Current Analysis. “It’s been proven to this point that Nortel, as it is, cannot continue. The overall economy and Nortel’s performance over the last several years” forced them to liquidate assets.

“A declining economy, coupled with the fact that put a couple of business units up for sale that didn’t get bought … the company’s in a situation now where its viability is in question,” says Zeus Kerravala of the Yankee Group. “I’m not sure they had other choices.”

Enterprise users are waiting for that shoe to drop, says Victor Bohnert, executive director of the International Nortel Network User Association (INNUA).

“We are glad to see Nortel formalizing some of the plans for its business units,” Bohnert said. “Earlier this month at INNUA’s Global Connect 2009, Zafirovski told our members that Nortel was seeking potential buyers for its business units, this move clearly indicates the implementation of that strategy.

“We continue to wait for news on the enterprise business specifically- and we expect that that news will be coming soon,” Bohnert said. “Our 4,000-plus members rely on Nortel solutions daily to drive their businesses forward – the important thing for them is that the technology survives. This recent move may signal the beginning of the end for Nortel as it exists today. Once a direction is specified for enterprise, we will work with all parties to help guide our members through the transition.”

Schuchart advises customers who had planned to purchase Nortel gear in the current budget year to go ahead with those purchases.

“If you’ve got a Nortel network and you’ve got budget on the books to buy Nortel equipment over the next couple of months, go ahead and do that,” Schuchart says. “Any plans beyond the immediate budget year need to be reviewed.”

But others might want to wait to see which company, if any, buys the Nortel enterprise business, Kerravala says.

“Whether it’s good or not for the customers depends on who acquires them,” Kerravala says. A company with little overlap might invest in the product line and keep it viable, he says; a company with a significant amount of overlap might just be acquiring the customer base and planning to migrate it to its own products.

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View more related contentGet Daily News by Email“Any investment you made over the last couple of years is gone,” Kerravala says. “It is a crapshoot as to what remains and what doesn’t, post-acquisition.”

Avaya and Siemens Enterprise Communications have reportedly shown interest in Nortel’s enterprise assets.

Schuchart advises customers who had planned to purchase Nortel gear in the current budget year to go ahead with those purchases.

“If you’ve got a Nortel network and you’ve got budget on the books to buy Nortel equipment over the next couple of months, go ahead and do that,” Schuchart says. “Any plans beyond the immediate budget year need to be reviewed.”

But others might want to wait to see which company, if any, buys the Nortel enterprise business, Kerravala says.

“Whether it’s good or not for the customers depends on who acquires them,” Kerravala says. A company with little overlap might invest in the product line and keep it viable, he says; a company with a significant amount of overlap might just be acquiring the customer base and planning to migrate it to its own products.

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View more related contentGet Daily News by Email“Any investment you made over the last couple of years is gone,” Kerravala says. “It is a crapshoot as to what remains and what doesn’t, post-acquisition.”

Avaya and Siemens Enterprise Communications have reportedly shown interest in Nortel’s enterprise assets.

 Schuchart advises customers who had planned to purchase Nortel gear in the current budget year to go ahead with those purchases.

“If you’ve got a Nortel network and you’ve got budget on the books to buy Nortel equipment over the next couple of months, go ahead and do that,” Schuchart says. “Any plans beyond the immediate budget year need to be reviewed.”

But others might want to wait to see which company, if any, buys the Nortel enterprise business, Kerravala says.

“Whether it’s good or not for the customers depends on who acquires them,” Kerravala says. A company with little overlap might invest in the product line and keep it viable, he says; a company with a significant amount of overlap might just be acquiring the customer base and planning to migrate it to its own products.

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View more related contentGet Daily News by Email“Any investment you made over the last couple of years is gone,” Kerravala says. “It is a crapshoot as to what remains and what doesn’t, post-acquisition.”

Avaya and Siemens Enterprise Communications have reportedly shown interest in Nortel’s enterprise assets.

 THIS WAS INEVITABLE. I have been very vocal for the last 8 yrs that their were going to be big name companies that would not survive the changeover to VOIP. When I mentioned companies like Nortel and Avaya I was laughed at. I hate to say I told you so but I TOLD YOU SO. But I am not gloating I was just predicting what takes place everytime there is a revolutionary change in an industry. Remember Digital and Wang. Same thing!

 

SHORETEL REPLACES 3.2% OF CISCO VOIP IN 2008

In an announcement from John Finnegan of ShoreTel ShoreTel continues to gain ground on the competition and replaced 3.2% of Cisco’s installed base of VOIP phones in 2008.

My observation of Cisco’s foray into VOIP is that it is a loss leader. A way for them to hang on to their existing Network gear which is under increasing attack from numerous competitors.

SHORETEL KEEPS ROLLING ALONG

Unified Communications Featured Article

April 22, 2009

 

ShoreTel Rolls Out VoIP System for San Francisco Giants

 

By Anuradha Shukla

TMCnet Contributing Editor

Pure IP Unified Communications (News – Alert) (UC) solutions provider ShoreTel has been named a preferred telecommunications equipment partner by the San Francisco Giants, a Major League Baseball team based in San Francisco, California.

 

 

ShoreTel (News – Alert) has rolled out a new VoIP unified communications system for the teams 2009 season that it is expected to transform the way Giants staff, media and fans communicate at AT&T (News – Alert) Park.

 

The new ShoreTel UC system replaces a Centrex system and will save the Giants significant daily savings in call costs and system management and support.

 

Around 450 ShoreTel IP Telephones deployed throughout the ballpark and other off-site facilities will streamline communications and reduce costs. The company is offering a number of new capabilities with their system including an integrated directory, and an easy-to-use UC desktop application interface for call management.

 

ShoreTel’s E911 Notification application improves emergency response by pinpointing the location of calls from a ShoreTel phone anywhere in the ballpark. The application then automatically informs all designated security staff and emergency responders.

 

The team is also using ShoreTel Converged Conference solution, ShoreTel’s unique Web dialer application, and the ShoreWare Contact Center application Workgroup. The Workgroup will be used for Giants’ ticketing, sales and customer service contact center.

 

The ShoreTel UC system also helps the Giants to make AT&T Park the “greenest” ballpark in the country. Their equipment has been independently tested by The Tolly Group to show energy savings of up to 62 percent over Cisco (News – Alert).

 

“The Giants were seeking a state-of-the-art communications system that would transform the way our front office staff, the media, and our fans connect at AT&T Park, and we were very excited to find that a local leader in IP-based communications offered an outstanding solution coupled with the best customer service in the industry,” said Bill Schlough, CIO, San Francisco Giants.

 

“The ShoreTel system will help us all communicate more efficiently, provide enhanced capabilities for our staff and luxury suite patrons, and ensure the safety of our fans. On top of all that, the system will save us hundreds of thousands of dollars per year. ShoreTel has hit a grand slam for the Giants!”

 

 

Anuradha Shukla is a contributing editor for TMCnet. To read more of Anuradha’s article, please visit her columnist page.

INTERESTING A SHORETEL SYSTEM IN ATT PARK

ShoreTel wins another one!

ShoreTel, a provider of IP unified communications solutions, announced that it’s now positioned first in worldwide market-share for small and mid-size businesses’ UC desktop applications.

 

 

 

The result is based on the findings in a report, “Q4 2008 Collaborative Applications Market Shares,” published by Synergy Research Group.

 

According to the report, ShoreTel (News – Alert) also is ranked sixth in market share for UC desktop units in large enterprises worldwide.

 

ShoreTel attributes this success to its easy-to-use UC system. The company has witnessed significant growth in customer adoption of its UC technology. In the SMB segment, ShoreTel beats its closest competitor Cisco (News – Alert) by almost 35 percent in sales of its popular ShoreWare Call Manager application suite, according to the report.

 

The company’s UC system consists of IP phones, switches, and software solutions.

 

The IP phone system is a completely integrated system that scales seamlessly from 1 to 10,000 users including PBX (News – Alert), voice mail, and automated attendant functions.

 

ShoreGear voice switches deliver unified communications across multiple enterprise locations, providing n+1 form of redundancy for very high system availability. They manage ShorePhone IP phones and analog lines, as well as Public Switched Telephone Network (PSTN) and intelligent signal transfer point (ISTP) trunks.

 

ShoreWare Call Manger end-user application suite makes it easier for users to easily manage their communications from their PC and seamlessly move between video, voice (wired or wireless) or instant messenger (IM).

 

ShoreTel recently introduced ShoreGear “V” switches, a new family of voice switches that integrate voice messaging and auto attendant functionality onto the switch, TMCnet reported. The new switches not only reduce the cost and complexity of deploying voice messaging services, but also provide local access to voicemail during a network outage.

 

“We have always believed that an easy-to-use yet powerful desktop application is the cornerstone of unified communications leadership, and ensuring that every ShoreTel user has access to this compelling tool is a key element of our commitment to delivering world-class customer satisfaction,” said John W. Combs, chairman and CEO of ShoreTel.

 

Synergy (News – Alert) Research Group found that ShoreTel built its PBX from the ground up as a unified communications platform, providing collaborative applications as a standard feature set.

 

“We believe this forward-thinking design has positioned ShoreTel as a market leader and has been fundamental to their market share gains in the face of much larger, capitalized competitors,” said Jeremy Duke, CEO, Synergy Research Group.

 

“While ShoreTel’s initial success has been rooted in SMB, we believe ShoreTel has the product and the management team to aggressively target the enterprise UC market, which will lead to further market share gains,” Duke said.

 

I have been selling ShoreTel from the beginning and people are finally starting to catch on that it is a great system because of the Architecture which means it will work in virtually any size enterprise, just keep adding switches and phones.

ITS A BRIGHT FUTURE-YOU MIGHT NEED SHADES!

ShoreTel: Real Opportunity for Upside

by: Andy Rachleff February 05, 2009 | about stocks: SHOR    

 

Andy Rachleff  

• ShoreTel (SHOR) is an emerging provider of IP PBX systems targeting enterprises. The company positions itself as a provider of unified communications solutions and over time will deliver product functionality that integrates wireline and mobile telephony, Outlook and Lotus Notes contact databases, instant messaging and voicemail.

My investment thesis:

1. ShoreTel has developed the most flexible architecture in its category, which supports better performance, smaller operating footprint and a faster rate of innovation.
2. The company has been expanding its distribution relationships which should result in a significant step up in order rates exiting 2008.
3. New products in 2008 should provide a lift to bookings.
4. Development & marketing investments will ultimately drive an increase in market share.

ShoreTel’s main innovation was a distributed, switch based architecture that permits enterprises to scale IP telephony capacity without needing to install & manage multiple control units. The switches maintain call routing information among themselves, distribute calls across the network, manage bandwidth consumption and connect to application servers which provide and manage higher level functionality. The system supports a consistent set of features across multiple locations & provides IT administrators a single point of management. the company has also invested heavily in integration with Outlook and call center applications.

The company is operating well and seems to be gaining share during the economic downturn. Revenue in the latest quarter grew 10% sequentially & 20% year over year (which the market grew only 10%). Gross margins remained steady at 63% and significantly, incremental operating margin was 85%, showing the potential leverage in the operating model as revenue scales. The company intends to invest this financial leverage in additional development & sales resources in fiscal 2009. This will suppress growth in operating income, but should translate to a higher revenue growth rate and ultimately, operating leverage in fiscal 2010.

THIS IS A GOOD EXPLANATION OF WHY SHORETEL HAS GROWN SO QUICKLY AND WHY THE TECHNOLOGY SETS THEM APART.ITS ALL ABOUT THE ARCHITECTURE.

BLOOD IN THE WATER DRAWS SHARKS!

Investment firm says Juniper’s switching business has much to gain By Jim Duffy , Network World , 12/29/2008 Share/Email Tweet This 3 Comments Print Juniper has the most to gain from Nortel’s tenuous financial position, according to a bulletin issued this month by investment firm Oppenheimer & Co. Juniper is aggressively recruiting Nortel’s channel partners as Nortel grapples with a decision on whether to file for bankruptcy as it readies some of its assets for sale. Nortel has reportedly received bids for its Metro Ethernet Networks business, which the company put on the block in September, and may be looking to sell off more businesses. Ten top problems network techs encounter: Download now”We believe recent reports that Nortel is contemplating bankruptcy are likely to force its enterprise channel to look for new alternatives,” states Oppenheimer analyst Ittai Kidron in the report, which was issued last week. “With roughly $600M-$700M in quarterly enterprise revenue, we believe Nortel’s enterprise business could deteriorate faster than its carrier business. We expect competitors to aggressively poach Nortel’s channels and enterprise business.” Oppenheimer believes Juniper has already taken “aggressive steps” targeting Nortel’s channels and is the one competitor — Cisco and F5 Networks being others — that could see the most meaningful upside relative to its market position. Related Content Nortel mulls bankruptcy Nortel reports loss, plans layoffs Juniper maps out 2009 plans Success story: Eastside Catholic School installs new LAN in 8 weeksWHITE PAPER The need to focusBLOG WAN veteran debuts new name, product lineBLOG 500M bps soon in a copper line near you, Ericsson says Broadband stimulus: Where do fiber, wire options fit? From Cisco and VMware – Solutions to Accelerate Data Center Virtualization: The Role of 10 GbEWHITE PAPER The changing role of the network engineerBLOG View more related contentView all related articlesJuniper was not immediately available for comment. Juniper’s overlap with Nortel is primarily in switching, routing and security, Oppenheimer notes. Juniper’s switching business should get a “solid boost” at Nortel’s expense from the ability to attract the beleaguered company’s channel partners, the firm asserts. “We calculate that just a 6% slice of the addressable enterprise business from Nortel — $754 million in annual revenue — would represent 16% of our 2009 revenue growth forecast for Juniper,” Kidron states in his report. Virtually all of Nortel’s enterprise businesses — switching, routing, security and VoIP — are “up for grabs,” according to Oppenheimer. Nortel has seen its market share deteriorate over the past two to three years in these areas, although its still retains a “solid, credible position” in VoIP, the firm asserts. For Cisco, the overall impact of Nortel’s precarious position will be muted, Oppenheimer notes. A 6% share gain of Nortel’s enterprise revenue could add $152 million to Cisco’s fiscal 2009 sales of $38 billion, slightly improving Cisco’s year-over-year growth to -3% vs. -4%, the firm states.

F5 may not benefit meaningfully from the fallout of Nortel’s situation because Nortel hasn’t been a serious competitor in the Layer 4 to Layer 7 market for years, according to Oppenheimer. F5 has already penetrated Nortel’s customer base, limiting the positive impact, the firm notes.

Other companies that are hurting must be really happy that Nortel is getting all the bad press. Don’t kid yourself anyone selling legacy based equipment is feeling the pinch. Nortel is just the most visible.

FLASH: SHORETEL WINS AWARDS AND GAINS MARKET SHARE

Shoretel Reports Financial Results For Second Quarter Fiscal Year 2009

Company Delivers Solid Revenue Growth of 16 Percent Year over Year

SUNNYVALE, CA, January 28, 2009 – ShoreTel, Inc., (NASDAQ: SHOR), a leading provider of Pure IP Unified Communications (UC) solutions, today announced financial results for the second quarter of fiscal year 2009, which ended December 31, 2008.

For the second quarter of fiscal year 2009, revenue was $35.3 million, a 16 percent increase over the second quarter of fiscal year 2008 and comparable to the record-high of $35.9 million in the prior quarter. GAAP net loss was $1.9 million, or $(0.04) per share, compared to GAAP net income of $1.8 million, or $0.04 per diluted share, reported in the second quarter of fiscal year 2008. GAAP net loss in the second quarter of fiscal year 2009 included $2.2 million in stock-based compensation expenses, compared to $1.7 million reported in the second quarter of fiscal year 2008.

Excluding the stock-based compensation expenses and related tax adjustments, non-GAAP net income for the second quarter of fiscal year 2009 was $226,000, or $0.01 per diluted share, compared to non-GAAP net income of $3.8 million, or $0.08 per diluted share, reported in the second quarter of fiscal year 2008, which included a tax benefit of $522,000.

GAAP gross margins for the second quarter of fiscal year 2009 were 63 percent, compared with 64 percent during the same quarter last year. GAAP gross margins in the second quarter of fiscal year 2009 included $239,000 in stock-based compensation expenses, compared to $147,000 in the second quarter of fiscal year 2008. Non-GAAP gross margins, which exclude stock-based compensation expenses, were 64 percent in the second quarter of fiscal year 2009, compared with 65 percent during the same quarter last year.

As of December 31, 2008, the company had $110 million in cash, cash equivalents and short-term investments and generated $1.5 million in operating cash flow during the quarter.

“Though we can’t avoid being affected by an economic storm of this magnitude, ShoreTel continues to build momentum with strong sequential international revenue growth and continued focus on developing innovative solutions that help our customers cut costs without compromising performance,” said John W. Combs, chief executive officer of ShoreTel. “While some of the industry giants once perceived as a ’safe bet’ continue to falter, ShoreTel is on track in executing its strategic plan to gain new customers, capture additional market share and deliver world-class customer satisfaction.”

Operational Highlights for the Second Quarter of Fiscal Year 2009

PRODUCTS

In October, the company announced enhancements to its global product offerings with the introduction of ShoreTel 8.1, which features global support for ShoreTel’s Unified Communications desktop client, as well as new IP phones and ShoreGear switches to round out the product line. With the introduction of 8.1, ShoreTel now supports 12 languages and 25 countries worldwide, including India and Japan.

ShoreTel extended its Unified Communications solutions by integrating its enhanced ShoreTel Converged Conferencing 7.1 solution with the ShoreTel 8.1 Call Manager, improving communication by allowing users to quickly host audio and web conferences, chat via IM, and share documents seamlessly from the same interface they use for voice communications.

The company further extended its offering aimed at the mobile workforce with the introduction of its new VPN Phone, providing VPN secured remote access for telephones over the Internet for workers that use a remote location as their primary office.

In December, the company announced that its ShoreWare Call Manager suite received Citrix Ready certification from Citrix Systems, Inc., the global leader in application delivery infrastructure, certifying that features in the ShoreWare Call Manager Suite run seamlessly in the Citrix XenApp environment.

PARTNERSHIPS

ShoreTel signed several new distribution agreements both domestically and internationally during the quarter, including Collins Communications in the United States; Business Technology Group (BTG), a reseller in New Zealand; and MTV Telecom®, a UK-based distributor of voice and data solutions, further extending ShoreTel’s distribution network worldwide.

ACCOMPLISHMENTS/AWARDS

For the second year in a row, ShoreTel was awarded a CustomerSat Achievement in Customer Excellence (ACE) award for Overall Customer Satisfaction. Demonstrating ShoreTel’s continuing commitment to customer service, the ACE awards certify, acknowledge, and celebrate outstanding achievement in Overall Customer Satisfaction and Technical Support Satisfaction. ShoreTel also won an ACE award for Technical Support Satisfaction, its first win in the category.

ShoreTel was named to Deloitte’s Technology Fast 50 Program for Silicon Valley Internet, media, entertainment and communications companies. This program highlights the 50 fastest growing technology companies in the region, with rankings based on the percentage of revenue growth over five years.

Business Outlook

The company is providing the following outlook for the quarter ending March 31, 2009:

• Revenue is expected to be in the range of $30 to $35 million.
• GAAP gross margins are expected to be in the range of 62 to 63 percent, including approximately $300,000 in stock-based compensation expenses. Non-GAAP gross margins are expected to be in the range of 63 to 64 percent.
• GAAP operating expenses are expected to be in the range of $24 to $25 million, which includes approximately $2.5 million in stock-based compensation expenses. Non-GAAP operating expenses are expected to be in the range of $21.5 to $22.5 million.

Use of Non-GAAP Financial Measures

ShoreTel reports all financial information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Many investors have requested that ShoreTel disclose this non-GAAP information because it is useful in understanding the company’s performance as it excludes non-cash and other special charges that many investors feel may obscure the company’s true operating performance. Likewise, management uses these non-GAAP financial measures to manage and assess the profitability of its business and does not consider stock-based compensation expenses and related tax adjustments, which are non-cash charges, in managing its core operations. ShoreTel has provided a reconciliation of non-GAAP financial measures in the tables of this press release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures with their most directly comparable GAAP financial measure.

In a tough economy the inovators shine. The abilityt o deliver a superior product and save customers money at the same time is driving ShoreTel sales allowing them to pick up 1% more market share while Cisco, Avaya and Nortel loose ground. Very cool!

At least they aren’t paying bonuses like the Banks!

Nortel announces more layoffs
3,200 will lose their jobs, and employee-stock compensation plans may go, too
By Tim Greene , Network World , 02/25/2009
 Share/Email Buzz up!Comment Print
Nortel Networks will further cut its workforce by 3,200 and eliminate bonuses as part of its ongoing bankruptcy reorganization.

The company had already announced 1,800 layoffs last year in an effort to curb losses and avoid bankruptcy, but they have not all taken effect. It has also been trying to sell off business units as a way to cut costs and raise cash.

Guide to Troubleshooting Application Problems: Download nowView a slideshow on the most notable IT layoffs of 2009.

The new layoffs, which will bring the corporate headcount below 30,000, are worldwide. They are staggered because of the varying local laws governing how much notification of termination must be given, the company says.

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View more related contentView all related articlesNortel also says it won’t pay bonuses that employees earned in 2008 as part of its annual incentive plan. The plan will be modified for 2009 to allow quarterly evaluations and payouts so both employees and the company will have shorter-term objectives that better fit with actual performance.

The company is seeking to further cut employee incentives by getting rid of its equity-based compensation plans – stock options, restricted stocks and performance stocks. Eliminating the plans would affect all outstanding equity employees have accrued, whether vested or not. No further equity would be awarded in 2009 if the proposal is approved by Canadian courts.
Nortel stock last traded Jan. 13 for 32 cents a share.

Despite those measures, Nortel says it wants to set up an incentive program to retain employees it deems essential while the business is still under bankruptcy protection. The company didn’t say exactly what the incentives might be.

Sorry to keep posting this bad news about Norteld but as the most visible of the Telecom Giants this is where most of the news is coming from but don’t kid yourself others are huring too. Keep your eye on Avaya and Vertical Networks just to name 2. Avaya is privately held now and so not as visible as they would be if they were still public and Vertical owns several platforms that probably are not doing well either. On the opposite end of the spectrum are ShoreTel who seems to be holding their own and a new player with a unique architecture call Star 2 Star. Check them out.