Channel Applauds Avaya-Nortel Swiftness, Now Real Work Begins

Avaya closed its acquisition of Nortel's enterprise business unit in late December, and had a full-fledged integrated product roadmap ready to present to channel partners in mid-January.

That would never have happened at the channel-clumsy Avaya of old, VARs agreed. Now the trick for Avaya will be to keep up its newfound channel momentum as it continues to fold the Nortel enterprise channel into its own.

"A lot of partners are asking, am I missing something? But they [Avaya] didn't suddenly create a situation where everyone had to make a decision right away," said John Gaillard, vice president of sales for distributor ScanSource's Catalyst Telecom unit. "We've been coaching the Nortel dealers we've signed to tell their customers it's not going to be a one-size-fits-all strategy. There are different paths for every partner and we're committed to supporting them all. If there's one message we want to get across, it's 'keep selling.' Go slow and don't panic."

Sensing an opportunity to gain channel traction, Catalyst Telecom, a legacy Avaya distributor, began to target Nortel VARs around the time of Nortel's bankruptcy in January 2009.

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The distributor has succeeded in adding a number of the country's top Nortel VARs as customers, and it's now hosting a series of national roadshows to educate partners on the integrated roadmap and sales techniques.

About 30 VARs attended a Thursday stop in the roadshow tour in Jersey City, N.J. Most attendees were existing Avaya VARs interested in how the integration of the Nortel channel would eat into their business, catalyze new opportunities, or both.

Gaillard said the biggest concern among Avaya and Nortel VARs so far was whether they'd have to change the products and services they're comfortable with. Not so, he said. With a few exceptions, most Avaya and Nortel products will remain in place for at least a year, and Catalyst is encouraging its VARs to move at a "deliberate pace."

"Avaya's strategy, especially in the enterprise space, is centralized around Aura," Gaillard said, referring to Avaya's virtualized unified communications platform. "They've continued to put out good resources and messaging and the tools we need to help partners. It's not a rip-and-replace strategy, and I think Avaya and Nortel dealers should be happy to hear that because it's not going to allow competitors a foot in the door."

Some VARs aren't so sure that's true.

"I think Avaya's communication to the end user community has been good, but to Avaya's partners, it's been a little lacking," said Tim McDermott, president of MAC Source Communications, a Syracuse, N.Y.-based solution provider and Avaya platinum partner. "They're rolling out the red carpet for the Nortel dealers, but for those of us who have been selling Avaya, the certification for Nortel products is taking a lot longer. While everything went down with Nortel last year, a lot of former dealers migrated to Cisco and ShoreTel. The longer it takes, the less chance we have to get that business back. I think it's getting a bit late in the game."

Many solution providers are willing to put those concerns aside, however, for the promise of a combined Avaya-Nortel channel and its ability to compete with Cisco and other titans. Entel Systems, a Pompton Plains, N.J.-based solution provider and longtime Toshiba VAR, added Avaya to its line card in the past year.

"They have a good reputation on the product side," said Steve Hodes, communications specialist at Entel, which attended the Thursday roadshow. "We were looking to branch out and we see a lot of potential in the merged sales channels because that customer base is just so big."

Next: Avaya's Channel Integration Plans

According to Avaya's stated plan to integrate channels, it will qualify Nortel VARs under the existing Avaya Connect program into various Avaya partner levels -- Platinum, Gold, Silver, Authorized -- commensurate with their existing volume and commitment levels with Nortel. That's not the same as certification; all Avaya VARs, regardless of level, still have to be certified to sell Nortel product if they want to do so, and vice-versa.

Catalyst Telecom has moved quickly to meet what it calls pent-up demand for networking and infrastructure purchases. The distributor on February 15 will begin to ship Nortel data portfolio products, with Nortel voice products ready starting April 1.

Catalyst's Gaillard said that the distributor's concerns over future Avaya distribution had calmed a bit, even though Avaya won't be deciding on who it will continue to use for distribution until the end of March. Most Avaya observers think specialty distributors like Catalyst and Westcon Group that are now well-versed in both portfolios are safe, and more of the focus is on broadline distributors like Tech Data and Ingram Micro that have legacy Nortel VAR relationships.

Todd Abbott, Avaya's senior vice president of sales and president of field operations, suggested that the breadth of coverage Avaya gets by maintaining its Tech Data and Ingram Micro relationships is probably too important to cut, but that many of the products in the combined portfolio would be better served by specialists, not broadline distributors.

"We're in good shape because we're very focused, we configure product, and we're treating this like we were launching another major vendor," Gaillard said. "We believe our model of distribution is what Avaya is looking for. If there are going to be any big moves, it'll be Avaya asking the broadlines, are you committed to adopting the model more like a Westcon or Catalyst?"

"A lot of people think Westcon is in the catbird seat because of its prior Nortel relationship, but the truth is the two channels [Avaya and Nortel] were so different that all of us are going to have to adjust," added Chris Marlar, Catalyst Telecom's director of merchandising.

VAR executives like MAC Source's McDermott said Thursday their strategies wouldn't change whether Avaya cuts distributors or maintains all of the existing Nortel relationships.

There are still a lot of questions, McDermott admitted. But he said he thinks the changes that have happened in Avaya's channel executive ranks are the reason the transition is as smooth as it's been so far.

"I think they get it," he said. "Three, even two years ago, Avaya was not a world-class channel organization, and it was a lot of 'my way or the high way' from them. That has changed."

McDermott added that MAC Source had partnered with a few Nortel-knowledgeable solution providers on deals, but expected to add Nortel expertise internally.

That will be one trend worth watching, Gaillard noted: VARs that add new expertise internally versus those that partner with or seek to acquire other VARs to gain Avaya or Nortel resources.

"I think the nervousness will stop as the roadmap gets more and more digested by partners," said Marlar. "Acquisition isn't what's needed necessarily. If you're a Nortel dealer, you don't have to be selling Avaya day one."

"The bigger thing that's happening is that a lot of partners are also slowly realizing they don't have to compete anymore," Gaillard added. "Once the channels stabilize, they'll be able to say 'let's focus on the real competition' and go after some of those Cisco and ShoreTel accounts."

Gaillard said Catalyst had added 13 of the top 30 Nortel partners in North America, and its efforts to recruit Nortel VARs to its distribution model would continue. The roadshows are thus far averaging about 40 attendees, he said, with about 30 to 40 percent of those Nortel VARs.

Count Black Box Network Services, one of the country's largest Nortel solution providers (and also a Cisco and ShoreTel VAR) among those encouraged by Avaya's efforts and Catalyst's ability to help smooth the transition.

Said Black Box account manager Kevin Cahill Thursday: "In short? I'm optimistic."