Nortel changes routes to market

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

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

Nick Pegley, vice president of marketing for small business 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 the company sells through Dixons and mail-order companies, it has products for 50-user business networks that 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," said Dixon.

NetGear will maintain a UK reseller policy by using distributors Micro Peripherals and Computer 2000, said Dixon. This will put the company in competition with its parent Nortel in the small and medium-sized enterprise (SME) market. Pegley said NetGear does not have the resources to support a reseller channel.

Peter Ellis, manager of reseller Chronos Computers, said Nortel is too expensive for smaller customers. However, 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," he said.

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