News that Westcon is to purchase fellow distributor Crane Telecommunications has brought a swift reaction from reseller concerned over the reduced choice available for resellers of Avaya, Mitel and Nortel systems – each a core product for both of the distributors.
Credit issues are a major concern for many resellers as many will be buying from both companies. The question is, will their credit limits be added together – we think not and that a channel squeeze may ensue. At the vendor level credit is also an issue but with Westcon resources vendors should be less concerned.
Terry Hunt, managing director of Universal Group and a customer of both distributors told Comms Business Magazine,
“This news has come as a complete surprise – there were no whispers in the channel that the deal was in the offing. We have dealt with Crane from the outset and always found them to be a great company to work with. We wish Crane Chairman David George, a person for whom we have the utmost respect, all the best.
However, this move will restrict choice in the channel and many resellers will be very concerned with what could be said to be a captive market for Westcon Group. Universal has a great relationship with both companies – we purchase Avaya systems from Crane and Mitel from Westcon. Today, we have all our eggs in one basket which is a bit of a concern, but we appreciate the economies of scale that the two companies will now achieve.
Sources close to Comms Business have indicated that it is likely that the new conjoined distributor will align the core business of Avaya, Mitel and Nortel under one business umbrella to be run by former Crane CEO David Grant and that the Westcon Group’s Cisco business will be run as a separate organisation by the Comstor organisation.
MTV Telecom Chairman Martin Hatcher picked up quickly on the news and appreciated the credit and choice issues likely to be faced by the channel.
“First of all I would like to wish David George all the best for the future. Like myself, David has been in the channel from the start and has been instrumental in the development of a professional alternative market.”
Hatcher went on to add, “I love this business. Every time it looks like going quiet up pops news such as this. Westcon and Crane have between them focused on the Enterprise sector and for resellers looking for a supportive alternative, and an SMB focus, MTV Telecom remains the best option in the channel.”