Westcon Buys Largest U.S. Nortel Voice Distributor

Westcon said it has purchased for an undisclosed sum the Buffalo, N.Y.-based distribution arm of privately held Ronco Communications and Electronics. Westcon, Tarrytown, N.Y., said the deal makes it the leading distributor of Nortel voice/data products in North America and one of the largest distributors of Nortel products in the world. Ronco said it will retain its Nortel reseller business and use the proceeds from the deal to provide even more services to its end-user customers as a Nortel Elite Advantage partner.

Westcon said the entire Ronco distribution team including Ronco President of Distribution Kurt Ruesch, who has overseen a group that has won plaudits from Ronco’s 150 voice partners for outstanding service, will move to Westcon. Ruesch will become vice president and general manager of convergence.

“This enhances our ability to position Westcon as the leading convergence distributor,” said Anthony Daley, executive vice president of the Americas for Westcon Group Inc. “We want to be the dominant force with every manufacturer we represent in this market.”

Westcon already has strong distribution ties with Cisco Systems and Avaya, the other leading convergence players.

“There is no one that is going to be close to us with the convergence go-to-market strategy we have,” boasted Daley. “Absolutely no one can touch the portfolio we have.”

Jeff Taylor, vice president of North American channel and distribution at Nortel, Brampton, Ontario, described the deal as a “landmark opportunity for our resellers to procure converged solutions” from a single distributor. “This is a significant breakthrough,” he said. “This absolutely takes it to another level.”

He also said Nortel is reaffirming its partner-centric go-to-market strategy with its new Project Renaissance initiative, aimed at making it easier for partners to do business with the company. The reinvigorated channel push comes as part of Nortel’s effort to move beyond an accounting scandal that led to the ouster of several top executives in 2004.

Solution providers agree that the merger creates a formidable force in voice/data convergence solutions that could mean higher margins for partners teaming with Westcon.

“It doesn’t take a rocket scientist to figure out that Westcon’s pockets are pretty deep. We really feel the combination of Ronco’s experience and Westcon’s size and power is going to benefit us in terms of resources, purchasing power, creativity to bundle services and product we didn’t have access to before,” said Alan Burdine, vice president of Communications Resources, a Chattanooga, Tenn., Nortel Premium Advantage partner that partnered with Ronco. “By melding two known distribution entities together, you are going to see a lot more focus on helping partners sell product and less on order-entry and back-end issues," Burdine explained. "Both of these guys together are going to be better than either one of them could be on their own.”

Burdine said he is looking forward to taking advantage of improved leasing/financing options from Westcon and is considering moving his data business to Westcon in the wake of the deal.

Barry Gerhardt, president of Barry Communications, a Worcester, Mass., Nortel Premium Advantage partner that has teamed with Ronco, said he was particularly pleased that Ruesch and his team are moving over to Westcon.

“That is excellent,” said Gerhardt. “We are looking forward to working with Kurt’s team not only on voice products, but on data products as well. If we are able to deal with the same people and one company for a converged solution, that adds huge value to us and reduces our time in having to deal with multiple distributors.”

Gerhardt said he is hoping Westcon’s larger size will mean improved product pricing on convergence products. “That scale should translate into greater discounts for us that Ronco wasn’t able to offer us,” he said. “Westcon obviously has much better buying power with Nortel now.”

Solution providers said Westcon’s convergence march comes as they see a sizable increase in the number of businesses of all sizes seeking converged voice/data solutions.

Rudy Casasola, CEO and president of Greenbelt, Md.-based Presidio, a Nortel Elite partner that has teamed with Westcon for years, said he is seeing growth in his Nortel and Cisco business. “The voice/data converged network is absolutely happening,” he said. “We are seeing an increased rate of adoption among enterprises.”

Casasola said he was previously sourcing his Nortel voice products from Nortel directly and will now shift that business to Westcon.

“This helps us serve our clients. We have a lot of customers on the voice side with Nortel and the data side with Cisco," he said. "With the voice piece going through Westcon now, we can source that product faster. In that respect, it improves cash flow and margin.”