Shared Technologies, Siemens Sign 5-Year Reseller Deal

By Lawrence Walsh  |  Print this article Print


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The Nortel bankruptcy forced Shared Technologies to rethink its vendor partnership and product strategy. Siemens Enterprise Communications’ OpenScape provides both the technology and flexibility to maintain its Nortel customer base and capture new business.

When Nortel declared bankruptcy one year ago this week, it was more than an inconvenience for Texas-based Shared Technologies, the largest North America reseller of the vendors’ telecommunications equipment. Overnight, enterprises already skittish about their IT investments were cancelling or curtailing their Nortel orders for fear of getting locked into a defunct platform.

"Most of our customers were high-end enterprises and they stopped buying Nortel. They only bought what they had to have," explained Tony Parella, president and CEO of Shared Technologies.

The Nortel meltdown was a wakeup call for Shared Technologies to diversify. It survived the Nortel bankruptcy by shifting more of its focus toward providing telecommunications support, consolidation and maintenance services to its existing customer base. At the same time, Shared Technologies embarked on a crash course to sign-up and build new alliances with new suppliers. First was Avaya, which was a natural fit because it bough Nortel’s enterprise business last summer, providing stability to the brand. Most recently, though, it’s tied up with Siemens Enterprise Communications, whose OpenScape unified communications architecture was appealing since it wouldn’t require existing Nortel users to abandon their legacy infrastructure. The agreement is for five years.

"It was important for us to address many customers that didn’t want to be tied to just one product; it was important for us to be less brand focused and provide customers with the best solutions and not just the best brands," Parella said.

Siemens Enterprise Communications is treating the Shared Technologies partnership as a huge win and validation of its OpenPath framework, which delivers telephony and unified communications applications that ride over any existing telecommunications architecture. It’s also a validation of Siemens strategy for expanding its presence in North America; it’s chosen to focus on building relationships with key partners such as Shared and replicating to valued partners.

"[Shared] was thrilled with what we had to offer," said Denzil Samuels, senior vice president of worldwide channels and alliances at Siemens. "When they looked at Siemens a few years ago, we just weren’t a contender."

The stakes are big for Shared, which has invested millions of dollars in a Siemens partnership that was broached just three months ago. Parella says his company is investing heavily in building a practice around Siemens because it the OpenScape portfolio represents a potentially high return on investment since it addresses both Shared’s existing Nortel customer base as well as net-new customers.

"We think there’s a huge addressable market, but most of the competitors [to Siemens] think the only way to address customers is through rip and replace," Parella said.

Demand for unified communications and telephony equipment is expected to increase in 2010. Many businesses—particularly in the enterprise segment—have deferred investments in communications infrastructure through the recession to contain costs. As the economy continues to recover and legacy equipment ages, business spending on communications technologies is expected to increase. Parella believes Shared is in a strong position since having the ability to address new communications builds through the Avaya/Nortel partnership, enhance existing infrastructure and provide customers with alternatives through the Siemens OpenScape portfolio.

The other competitive difference Siemens brings to the partnership is flexible pricing. Siemens offers services-based pricing for its software; customers are able to pay for applications on a recurring payment schedule similar to managed services. Shared’s Parella takes partial credit for driving Siemens into creating this pricing structure.

"It’s hard for me to be bullish, but compared to 09 it’s got to be better," Parella said.

Siemens’ Samuels believes the Shared Technologies partnership is the beginning of an accelerated expansion of its North America channel.

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.

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