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Navigating Economic Uncertainty

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The recent stock market gyrations have given financial decision makers cause for concern over making further investments in IT. Many economists now believe that the economic recovery that began in 2009 has stalled and we’re possibly entering another period of slow growth – the dreaded double-dip.

ShoreTel recently announced its quarterly results and Kevin Gavin, ShoreTel’s CMO had some interesting insights when answering a question from a financial analyst about how ShoreTel performs during periods of economic uncertainty:

“In a recessionary market clearly things slow down. The pipeline stretches out and businesses take longer to make decisions. But what they tend to do is to think about two things. One is to consider other alternatives and so as the challenger brand we like it, they look beyond just the market leader to see if there is anybody else that they should be considering. So the slowing down actually helps our consideration rate which is really important.

And the second thing they do is they increase their focus on total cost of ownership in the evaluation criteria. But that tends to help us as well because we have a clear TCO story, it’s a winning story. So it helps to increase our win rate. So the reality is that we like a growing stable market with increasing employment to be sure, but during recession we think we can do well to continue capturing market share. And so we will continue to drive forward.”

So how has ShoreTel performed during the recent period of declining growth?

For the past five quarters, as the U.S. economic recovery has begun to sputter, ShoreTel has actually increased its growth rate as customers who previously would not have considered ShoreTel, gave us a chance and ended up choosing ShoreTel over other vendors.

Sequential Q2'10 Q3'10 Q4'10 Q1'11 Q2'11
ShoreTel Sequential Revenue Growth Rate  

14.0%

 

4.9%

 

7.8%

 

8.1%

 

9.6%

Seasonally Adjusted Real U.S. GDP  

3.8%

 

2.5%

 

2.3%

 

0.4%

 

1.3%

The days of “nobody ever got fired for buying IBM” are over.

Decision makers today are more prudent in their selection of IT vendors and ShoreTel is benefitting from the increased level of consideration. It’s a win-win where customers get the right solution at the lowest TCO and ShoreTel continues to experience record growth as a company.