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Nortel and Cox Communications partner for joint equipment and services

Nortel is capitalizing on the cable industry's push into enterprise services by partnering with Cox Communications to offer joint converged services and equipment -- but will the vendor be battling its own channel?

Nortel -- which has a substantial equipment partner channel of its own -- is now teaming with Cox Communications Inc. to sell the cable company's converged enterprise services with Nortel's own networking equipment.

The deal, made public Monday at The Cable Show in New Orleans, has Nortel's direct sales team selling Cox Business's converged voice, video and data with equipment under Cox's brand name. In return, Cox's sales teams can include Nortel's equipment as part of a total infrastructure and services package.

Banking on the growing trend of cable operators pushing into the enterprise, Nortel also took the opportunity to launch a small business sales center to help cable operators become its partners. Nortel will offer them help in sales, products, installation and ongoing support. Cox is the first cable reseller to sign up for the center.

As Nortel leads cable companies into the reseller fray, the company's existing channel partners could find themselves battling new competitors that are doubly armed with services and equipment. For now, Nortel's current partners are likely to find themselves competing against Cox/Nortel sales teams in the cable company's 18 markets across the U.S., where it already has 240,000 mostly small business customers.

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"It puts another channel into the market," acknowledged Cortland Wolfe, director of business development for commercial cable services at Nortel. But he said the competition won't affect existing partners. They will face more competition from telecom service providers that offer enterprise converged voice and data, he said. As for value-added resellers (VARs), they are "selling just equipment," he said.

In addition to converged voice, video and data, Cox -- the third largest cable company in the country -- also offers hosted and managed IP telephony, optical local area network (LAN) and virtual private network (VPN). Nortel's enterprise portfolio includes a broad series of routers, Ethernet switches, wireless access points and soft phones, as well as its IP-based PBX system and application platforms for unified communications.

The partnership puts Cox squarely into the reseller market, and strengthens sales opportunities since the company can offer everything the customer needs from installation to support services.

"When customers have equipment needs, we have to either refer them to an integrator or equipment provider, or we say we can't help them. Neither one is the ideal solution," said Todd Smith, a Cox spokesperson, adding that Nortel's partners will start by cross-selling to existing customers.

"We are actually giving them a specific target list -- these will be our one-product customers. They will essentially try to sell additional products as well as bundled services," Smith said.

Wolfe said the "huge upside" of the deal for Cox is that the company could push further into the larger enterprise market, instead of just focusing on small and medium-sized businesses (SMBs). The deal also gives Cox a "full managed care" option for its enterprise equipment.

Meanwhile, Cox could see growing competition from other cable operators. Nortel's new cable partner center will assist users with trained teams that will make sales calls on their behalf. The center will also offer help desk support and will position products and services specifically geared toward small businesses. Nortel will also provide warehousing, provisioning, configuration, installation and training.

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