Westcon's Windfall
The pact first and foremost puts more muscle behind Westcon's already robust voice/data solutions business. It is not overstating it to say this deal gives Westconwhich has invested a boatload in the converged voice/data solutions businessan even wider lead over any and all distribution comers. Broadline distributors and value-added distribution competitors alike are going to have trouble measuring up. If you are a solution provider focusing on this market, you'd be foolish not to look to Westcon, which has staked out strong positions with most of the leading voice/data vendors.
Another big plus from the deal is a beefed-up position in the voice-over-wireless-LAN business with wireless telephony vendor SpectraLink. This comes on top of ties to Cisco and Avaya on the hardware front; Citrix, Cistera, Berbee and LiteScape in the application software appliance market; and, in the all-important ISV world, partnerships with the likes of Verint and SDC Solutions. Solution providers say they could see margin gains in the voice/data business as a result of Westcon's formidable size, demand-creation tools, marketing assistance and back-end logistics capabilities. The biggest potential losers in the deal are going to be broadline distributors, which could see market-share losses. For Nortel, the deal is a slam-dunk, giving the vendor a powerful distribution partner to drive voice/data channel sales growth.
The pact comes as Nortel pushes ahead with what it is calling Project Renaissance, a vigorous recommitment to Nortel's partner-centric go-to-market model. Renaissance indeed. Both Nortel's and Westcon's VoIP businesses will flourish in the wake of this deal, which shifts the balance of power in the voice/data solutions channel.
What do you think of Westcon's windfall? Let me know at (781) 839-1221 or via e-mail at [email protected].