Roulston Technology Partner Jon Arnold on Shoretel Acquisition of M5 Networks

March 14, 2012

ShoreTel recently announced the acquisition of the privately held, cloud-based, voice and unified communications provider M5 Networks. ShoreTel is the third largest on-premise, IP-based PBX equipment manufacturer who has grown organically since it was founded in 1996. The acquisition is the first entrance into the fragmented but fast growing hosted telecom services business by a major PBX manufacture. M5 Networks provides hosted phone and other telecom services to business clients and prevents them from having to make large investments in phone equipment by having it stored, maintained, and updated at a remote data center in exchange for monthly payments. Jon Arnold states, “From a business and investor point of view, the main difference between the two companies is their business models. ShoreTel’s core business is premise-based phone systems – in short, a capital expense where the revenues largely come upfront. M5 is selling a service – cloud-based VoIP, where the hardware is a nominal component. This is really an annuity business that delivers recurring, predictable revenue – cashflow to fund R&D, customer support and customer acquisition. Long term, M5 has a more profitable and sustainable model, and it’s a great way build both the top and bottom lines for ShoreTel.” To read the full article please visit http://jonarnold-analyst.blogspot.com/2012/02/shoretel-and-m5-networks-big-bet-big.html.

 

Jon Arnold is principal of J Arnold & Associates, an independent telecom analyst and marketing consultancy based in Toronto, Ontario which serves clients all over the world. JAA’s primary focus is on IP communications and disruptive technologies, such as VoIP, telepresence, cloud communications, mobile broadband, IPTV, unified communications, peer-to-peer, social media and Web 2.0. In terms of accolades, in May 2009, Focus.com included Jon’s widely-read Analyst 2.0 Blog on their Top 15 VoIP Blogs of 2009 list, along with their 2007 Top 25 VoIP Blogs list. In May 2008, Jon’s blog was rated #1 among all Telecom blogs by Blogged.com, and VoIP Now included his blog on their Top 100 Telecom blogs.

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