Nortel makes NetGear change in routes to market

Nortel Networks is confident it can hold on to its resellers that target SMEs after it spins off its NetGear subsidiary.

Nortel Networks is confident it can hold on to its resellers that target SMEs after it spins off its NetGear subsidiary.

Nick Pegley, vice-president of marketing, small business solutions division at Nortel, said NetGear is a retail company but resellers prefer the support of Nortel's full-value channel structure. "The spin-off is not about products, it's about the routes to markets," he said.

Steve Dixon, vice-president of sales and marketing at NetGear, said although NetGear does sell through Dixons and mail-order companies, it has products designed for 50-user business networks which compete with 3Com's OfficeConnect range. "In the US, NetGear needs to develop retail to hit the right market. Outside the US, most businesses are small and buy from VARs, not retail," he said.

By using distributors Micro Peripherals and Computer 2000, Dixon said NetGear will maintain a UK reseller channel, a move which will put it in competition with its parent Nortel in the SME market.

Pegley said NetGear did not have the resources to support a reseller channel.

Peter Ellis, manager of VAR Chronos Computers, said Nortel was too expensive for SME customers, but Deepash Shah, technical support manager at SME reseller Ashgoal, said he often turned to the vendor for help with networking issues. "We care about price, but we need access to technical assistance."

Stuart Furbank, owner of Lancelot Communications, said he never thought of Nortel as a vendor for SMEs and it should keep NetGear if it was after that market.