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Growing adoption of hosted VoIP and collaboration platforms that come with higher profits and retain more value are combining with unified communications, mobile and the cloud to meet customer demand.

ShoreTel’s acquisition of M5 is good news for solution providers looking to expand solutions into the cloud and reach that growing number of customers looking to deploy IP communications through a hosted model.

Cloud computing, virtualization, data center economics and the flexibility of services-based models are being tagged as growth drivers in the Unified Communications-as-a-service (UCaaS) market. Gartner expects the market to grow 36 percent each year through 2015, to reach $2.2 billion.

Peter Blackmore, CEO of ShoreTel, said the acquisition “is a critical step in our evolution and enables the company to capitalize on trends in cloud computing and advance our enterprise communications strategy.”

The M5 deal follows ShoreTel’s October 2011 acquisition of Agito Networks, which allowed ShoreTel to bring its UC solutions to mobile devices. ShoreTel also recently made substantial investments in partner enablement and awareness – a reflection of its commitment to partners and desire to compete against the likes of Cisco, Polycom and Avaya.

M5 will operate as a ShoreTel business unit led by M5 CEO Dan Hoffman, who will become president and general manager. Hoffman says he shares ShoreTel’s approach to UC as well as an intense focus on customer satisfaction, a hallmark of M5’s business approach.

In a blog on M5’s Web site announcing the sale of the company, Hoffman said combining the two companies is like “chocolate and peanut butter.” He credits ShoreTel with having the “best app on the market to insert your desk phone into your smart phone.”

“Their UC and collaboration suite is polished, as are all their interfaces. And they make their own handsets, allowing them to control this all-important customer touch-point,” said Hoffman. “They have a formidable presence in the channel. M5 needs these things.”

ShoreTel’s success is based in a loyal and aggressive channel that competes for business against larger rivals. ShoreTel’s acquisition of M5 is further proof of its commitment to reinforce its partners with new resources designed to keep momentum going.

With the M5 acquisition, ShoreTel execs say the Champion Partner reseller program will evolve to include the ability to offer hosted services once the reseller has been qualified and certified.

ShoreTel has surprised the rest of the unified communications market with its affordable and quality telephony and collaboration products. A recent Aberdeen Group survey of 236 different businesses identified ShoreTel’s unified communications solution as the easiest to use, deploy and manage when compared to other solutions on the market today.

M5′s specialized knowledge, infrastructure and skills give ShoreTel faster entry into the hosted UC market while allowing it to focus on growing its traditional, premise-based UC business, according to the companies.

M5, meanwhile, counts more than 2,000 customers with enterprise-grade communications on a subscription basis. ShoreTel is acquiring M5’s entire operation, including its customer base, distribution capability and proprietary network.

ShoreTel notes the engineering teams will remain separate, but plans include cooperation and coordination to leverage the innovation and best practices of both groups so both product roadmaps benefit from combined capabilities.

And while M5’s Hoffman notes in his blog that ShoreTel doesn’t yet know how to be a cloud service provider, it does understand what their competitors have not figured out: “Cloud isn’t just partitioning software and running it in a datacenter – it needs to be your DNA.”

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