Channel Consolidation: Merger Creates $50M Cisco, Microsoft VAR

Earlier this week, Waltham, Mass.-based Netivity Solutions, Farmington, Conn.-based Woods Network Services and NetTeks Technology Consultants, Boston, banded together to form NWN. The new company carries high-level badges from several vendors, including Cisco Gold, Microsoft Gold and Novell Platinum partner status.

"The real optimum position to be in is a balanced product/professional services/managed services model," said Mont Phelps, president and CEO of NWN, Waltham. Phelps previously served as CEO of Netivity, which acquired Woods Network Services last fall.

NWN combines Netivity's managed services, security and software skills, Woods' enterprise VoIP expertise and NetTeks' SMB-focused IP telephony capabilities.

In particular, the union creates somewhat of an anomaly within the Cisco solution provider realm: a Gold partner that focuses on the SMB market, said Ethan Simmons, vice president of advanced technologies at NWN, who previously served as a partner at NetTeks.

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"We feel we can dominate the commercial market since most of the Gold partners are not focused there," Simmons said.

With the merger, NetTeks goes from a $10 million company to a solution provider on track to hit $50 million in revenue this year, he said. NWN has some 100 employees, most of them in engineering, and will serve all of New England as well as parts of New York and New Jersey.

The critical mass NWN now brings to the table is crucial as the firm goes after top-level Master voice and security specializations rolled out by Cisco earlier this year, Phelps said.

"Scale matters, and I think it puts us in a higher position," Phelps said.

The timing for the merger is right because partner consolidation is heating up, Simmons said. "With consolidation going on, you don't want to be too late to the game. It's better to be early than get left behind," he said.

Cisco VoIP practices seem to be in particularly heavy demand, Simmons said. "I think everyone sees that IP telephony is the real deal, and Cisco has made itself one of the dominant players. It's too much work to try to [build] your own IP communications practice, so the only choice is to find mature practices that are out there and roll them into the fold."