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ShoreTel (News - Alert) has delivered on its promise to enter the hosted market in 2012. The recent announcement that it would acquire M5 Networks gives ShoreTel instant entry into hosted unified communications. M5 Networks (News - Alert) is an established, New York-based hosted provider that serves small and mid-size businesses (SMBs) in North America. The transaction will close in March 2012. M5 Networks will operate as a separate ShoreTel business unit and will enable ShoreTel to offer a hosted UC service (M5 hosted services target the 5-500 user market) or its own on-premises IP-PBX (News - Alert) that scales small to large (24-20,000 users).

The hosted market is maturing quickly. Today’s smaller businesses are carefully weighing their options and deciding whether a hosted telephony service or the purchase of an on-premises system makes more sense for their particular business requirements. On the plus side, a hosted service eliminates the installation and ongoing maintenance costs of deploying an office phone system. It is easy to add new users as growth occurs and simple to subscribe to new services as these become available. A hosted service can also address redundancy and disaster recovery with servers co-located at the Service Provider site or remotely located within the Service Provider network so that inbound calls, at least to voicemail, can always continue. In lieu of an on-premises telephone system and the associated monthly telecom, data costs and perhaps even IT personnel, customers pay a predictable monthly fee to utilize the hosted service for their communications needs.

There are differences among hosted providers, however, so businesses will want to review the actual scalability, system features and applications available. It is also important to find out more about the recovery options, the selection of phones, the user interface and the level of ongoing support. Pricing and coverage are critical. What is included in the fixed monthly fee? How do international calls affect this rate? Managed VoIP providers use private connections to data centers. Where are these data centers located? Is coverage national or international?

Whether a business decides to subscribe to a hosted service or prefers to purchase and install PBX equipment, ShoreTel is now in a position to offer either option.

M5 Networks – Fast Facts

• Headquarters: New York
• Employees: 200
• Services: Telephony, Contact Center, UC Suite (IM and other services planned)
• Target (News - Alert) market: 50-500 seats
• Customers: 2,000 in U.S. with a majority on the east coast (expansion in Canada is underway)
• Data Centers: three in U.S. (UK is likely site for first European data center)
• Phone (News - Alert) Support: Cisco 7900 Series IP Phones (plans to certify ShoreTel phones in future)

Availability: The ShoreTel-M5 Networks transaction will close in March 2012.