LG-Nortel and Accton Technology form joint venture

LG-Nortel and Accton Technology Corp. have announced a joint venture agreement that will deliver voice and data solutions to the North American business market, under the company name, Edgecore Networks Inc.

As part of the joint venture, LG-Nortel will own 60 per cent of the share and Accton Group will own the remaining 40 per cent. Edgecore Networks is the tentative new name of the company which was most recently a subsidiary of Accton Technology said Keith Alexis, general manager of Edgecore Networks. While under the wings of Accton Technology, Edgecore Networks served as the company’s networking division.

Edgecore has been around for a few years now, but the company really only served in areas outside of the North American market, Alexis said. The joint venture is set to be completed by mid-February and will help the company enter into the North American small to mid-size business (SMB) and large enterprise markets.

“We’re re-branding Edgecore Networks and bringing it to North America,” Alexis said. “We’ve experimented with retail before, but now we’re looking to change that by getting into the larger enterprise markets too.”

Over the last several years, Alexis admits that since the company has been so focused on its business model, the visibility component for partners was really left out. In total, there are about 4,100 resellers in North America, of which about 1,200 are from Canada.

Almost all of the company’s business comes from the channel community, with a small percentage still being taken direct due to legacy business, Alexis said.

“It’s important that our partners have that visibility so we’ll be focusing heavily on our branding strategy,” Alexis explained. “A lot of our smaller resellers have hung in there and have stuck around over the years, whether we’re visible or not, so thank you. We’ll be more visible and in your face from a support and capabilities standpoint.”

The company currently has several North American distribution partnerships with companies such as Tech Data and Ingram Micro.

As part of its strategy to grow in the U.S. and Canadian markets now, Alexis said the company will target partners who are in the high performance computing and storage builder space.

Edgecore Networks is also in the process of launching a new reseller program, which will be a points-based program, Alexis said. The program is tentatively scheduled to be introduced by the end of next month.

“Instead of a hierarchy system, we’re moving to a points-based program where partners will earn points when they sell products,” he said. “In turn, partners will be able to redeem these points for things such as training.”

Both companies will jointly participate in the research and development, manufacturing, marketing, new business development and brand use activities. Edgecore will have a head office location in Irvine, Calif.

“LG-Nortel is central to our ability to grow and expand into new segments,” Alexis said. “LG-Nortel brings voice and telecom together, Accton brings the data products, and we bring the whole solution together with a convergence story.”

Jae Ryung Lee, the CEO of LG-Nortel, said the joint partnership will provide even more new North American business opportunities.

“This partnership will provide significant new opportunities to reinforce our brand, increase our global competitiveness and help our customers embrace the future opportunities and challenges of the converged communications market,” Lee said.

Although the company’s new name is tentatively planned to be Edgecore Networks, Alexis said eventually, the company’s name will change.

“We’ll slowly (change) the brand to a different name, but what it will be is up to LG,” he said.

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Jim Love, Chief Content Officer, IT World Canada

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Maxine Cheung
Maxine Cheung
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