In January of 2009, Nortel Networks Corp. filed for bankruptcy.
The collapse of the once-mighty telecommunications equipment maker badly bruised distributors and resellers of its gear.
“In the Canadian business we had to really diversify," said Lynn Smurthwaite-Murphy, senior vice president of U.S. and Canada with Westcon Group, which was Nortel’s largest distributor globally of unified communications and data-networking solutions. “We sought diversification in Canada and we broadened our portfolio significantly."
In the wake of the bankruptcy, New York-based Westcon formed partnerships with other vendors including Brocade as its vast network of channel partners sought to drive sales through other key suppliers. Smurthwaite-Murphy said a significant number of channel partners purchased Nortel solutions exclusively through Westcon, and such partners already had other relationships in place at the time of the filing. None of Westcon’s partners only sold Nortel solutions, she said.
“Many companies in the last five years in the drive to become a trusted advisor knew that they really couldn’t have one option in their kit bag or they really couldn’t call themselves a trusted advisor," Smurthwaite-Murphy said. “That’s what a reseller, a value added reseller is supposed to do and so most of them had options in their portfolio."
Eleven months after the bankruptcy, one of Westcon’s closest vendor partners, Avaya, completed its $475 million acquisition of Nortel’s enterprise solutions business that included voice, data and government-systems operations. Through the acquisition, Basking Ridge, N.J.-based Avaya picked up unified communications/telephony, networking and government businesses.
Restoring Relationships Post-Bankruptcy
The channel-oriented Avaya faced an obvious challenge: Many Nortel resellers had moved onto other partnerships with the likes of Cisco Systems and Juniper Networks in the wake of the bankruptcy filing.
“We lost a number of those partners as you might expect," said Lee Panosian, Avaya's chief of staff, networking. “They didn’t know what the future might hold so they moved on."
Avaya decided to do something about that. In January 2010, Avaya’s data networking team implemented a “Get Well" initiative, targeting 38 key partners that had either left Nortel or had stopped doing a significant amount of business with Avaya. Avaya sought feedback from partners and asserted its commitment to the business. The face-time paid off as revenue contributions from those partners rose 60 percent, Panosian said.
