Resellers stand to capitalise on new e-business opportunities following Nortel Networks' announcement last week that it will pay $US2.1 billion in shares to acquire Clarify.
Clarify produces front-office software designed to manage customer relationships.
According to Nortel, the deal will allow it to offer software that helps businesses build a single view of a customer's experience across sales, marketing, and services, using data from a variety of sources including the telephone, faxes and the Web.
These capabilities will help businesses anticipate and respond to customer needs, personalise interactions, and increase customer loyalty, according to Nortel.
Mitch Radomir, business development manager for one of Nortel's resellers, NetStar Networks, commented the deal represents a huge opportunity for resellers to move up the food chain. 'It provides resellers with the opportunity to get into the value side of the business,' he said.
According to Radomir, integrated call centres will become strategic e-business solutions a year down the track as companies look to provide one-stop solution centres. He argues resellers will have the opportunity to provide customers with a solution that enables them to manage and solve customers' problems in an integrated fashion.
'This is a real e-commerce solution,' he said.
Another reseller, Com Tech, also believes it is positive. Com Tech's director of technical marketing, Darron Lonstein, said the deal adds weight to the whole CRM and call centre market. 'From our perspective we believe it will provide us with added opportunities in those areas.'
Lonstein said he saw the whole area, with e-business and integrated call centre functions, merging to provide a total customer interface. 'It is a very big part of our business and a key focus. We believe that with Nortel adding its weight behind this area it will allow us to provide integrated solutions to our customer base.'
He believes it is a very positive move for the market and one which is going to be very beneficial to both integrators and customers.
If the transaction is completed, Clarify will become a wholly owned subsidiary of Nortel Networks and retain its headquarters in San Jose, California. Tony Zingale, the company's president and chief executive officer, will continue to lead the company.
The transaction has been approved by the boards of directors of both companies, and is expected to close in the first quarter of 2000. It isn't expected to affect Nortel's earnings per share in calendar 2000, and should be accretive in 2001, excluding acquisition-related charges in both cases, Nortel said.
Clarify shareholders will receive a fixed exchange ratio of 1.3 Nortel common shares for each share of Clarify common stock. Based on the closing price of $52.69 per common share of Nortel Networks on October 15, this represents $68.49 per share of Clarify and an aggregate price of $US2.1 billion for the common shares of Clarify on a fully diluted basis.
Richard Neale, Nortel's director of marketing communications, enterprise solutions, South Asia Pacific, claims the deal will help build the company's portfolio of applications and infrastructure for call centres and unified customer contact centres.
According to Neale, the Clarify eFrontOffice suite provides advanced customer relationship management tools for such centres. Clarify is widely deployed in customer contact centres based on Nortel Networks platforms.
'Systems integrators and value-added resellers have a demonstrated role in implementing customer relationship management solutions,' said Neale.
'Nortel Networks' call centre applications [such as the Symposium call centre portfolio], IP and circuit switched infrastructures will combine with the Clarify tools, offering integrators and their customers reduced costs and complexity as they develop customer solutions,' he claimed.