New Network Spin[off] For Calence, Avnet

The new Phoenix-based company received regulatory approval for the merger and now begins the process of integrating a pair of nine-figure businesses into one $300 million networking VAR, said Mike Fong, CEO of Calence.

“I'd love to say we&'re done integrating. As of Feb. 1, everyone now is in the new company. We&'re doing business, but still putting together the people and the business processes,” he said.

Calence was a $100 million VAR, while Avnet Enterprise Solutions had about $200 million in networking business that now goes to Calence. The deal makes the new company one of the largest pure-play network solution providers in the United States with about 400 networking professionals located in 20 offices, according to Fong.

As part of the agreement with Avnet, Calence was awarded a 5-year deal to provide voice and data services to the Phoenix-based distributor, Fong said.

“We will provide monitoring and operations. They are in 68 countries around the world.

This positions us as a leader in business process outsourcing,” Fong said. He would not provide financial details of the agreement, but he said Avnet would save money outsourcing its telecommunications to Calence.

While Calence is a private, separate company from Avnet, the distributor has a board seat and is a shareholder in the solution provider, Fong said. Cisco is its largest vendor partner but it also sells Checkpoint and other solutions, he said.

Its customers are primarily Fortune 3000, but it also inherits a large presence with education and public sector companies from Avnet, Fong said. Calence expects its new depth and breadth of products and 20 locations to be a differentiator with customers compared to other solution providers, Fong said.

“On top of that, we can provide a remote NOC to total outsourcing. I don&'t know of another company doing that,” he said.

Enterprise spending is increasing, which bodes well for the new company, Fong said.

“The tide is rising for everybody. Security continues to be a big focus and customers are also more responsive to IP telephony,” he said.