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M A S L O N
MASLON EDELMAN BORMAN &
BRAND LLP

    P 612.672.8200

F 612.672.8397

www.maslon.com
    3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota

55402-4140

    January 14, 2005

    Martin R. Rosenbaum

Direct Phone: 612-672-8326

Direct Fax: 612-642-8326

Martin.Rosenbaum@maslon.com

VIA EDGAR, FAX & FEDERAL EXPRESS

Michael Pressman, Esq.

Special Counsel

Office of Mergers & Acquisitions

United States Securities and Exchange Commission

Washington, D.C. 20549-0303

    Re:

    Norstan, Inc.

Schedule 14D-9 filed December 23, 2004

File No. 5-15836

Dear Mr. Pressman:

This letter will respond on behalf of the Company to your comment letter dated January 11, 2005
(the “Comment Letter”) with respect to the Schedule 14D-9 filed by Norstan on December 23, 2004.
Attached as Exhibit A is a proposed revised version of Item 4 of Schedule 14D-9. Consistent with my
telephone conversation with you on January 13, 2005, the Company intends to file an amendment to
Schedule 14D-9 reflecting these changes as soon as it receives confirmation that the staff has no
further comments.

To facilitate your review, we have included in this letter your original comments (in bold)
followed by our response, which have been numbered to correspond to your letter.

Item 4. The Solicitation or Recommendation – Background of the Transaction, page 6

    1.
    Describe the results of your efforts (through KeyBanc Capital Markets) to seek a
potential minority investor in Norstan. Specifically why did you abandon these efforts in
favor of a sale of the Company?

As shown on Exhibit A, the Company intends to amend Item 4(b)(i) regarding the background of the
transaction. In the first paragraph of the amended Item, the Company provides additional detail
regarding its efforts, through KeyBanc, to seek a potential minority investor. In the second
paragraph, the Company describes in greater detail the reasons that the Company decided to pursue a
full sale.

January 14, 2005

Page 2

    2.
    Describe the material terms of the offer (originally and as reduced) by the “other
bidder” with whom negotiations were terminated.

As shown on Exhibit A, the Company intends to expand the discussion in the second paragraph of Item
4(b)(i) to describe the material terms of the original and reduced offers from the referenced
bidder.

    3.
    Explain why you abandoned efforts to sell Norstan in January 2004.

As shown on Exhibit A, the Company intends to expand the discussion in the second paragraph of Item
4(b)(i) to describe the reasons that the efforts to sell Norstan in January 2004 were abandoned.

    4.
    When Black Box contacted Company representatives in September 2004 regarding an
acquisition transaction, discuss why you elected not to seek other competing offers for
Norstan.

As shown on Exhibit A, the Company intends to add a discussion (see the proposed eighteenth
paragraph of Item 4(b)(i)) of the reasons Norstan elected not to seek other competing offers in
September 2004.

     Reasons
for the Board’s Recommendation; Factors Considered, page
10

    5.
    This section should describe all factors considered by the Board and forming
the basis for its recommendation. See Rule 14e-2(a) of Regulation 14E. The introduction
to this section indicates that the factors listed are not exhaustive. Revise similar
language in the first paragraph after the bullet points on page 11.

As shown on Exhibit A, the Company intends to revise the lead-in paragraph of Item 4(b)(ii) to
indicate that the discussion lists all material factors considered by the Norstan Board. The
Company believes it cannot accurately characterize the list as “all” factors the Board considered,
because it would be impracticable to reflect the entire discussion, and because individual Board
members may have considered factors that were not articulated. The Company believes it would not be
appropriate to revise the first paragraph after the bullet points, because it already states that
the preceding factors are believed to be all material factors.

     Annex A – Fairness Opinion of KeyBanc Capital Markets

    6.
    The text of the opinion indicates that it is for the “confidential” use of the Board
of Directors. This appears to be inconsistent with the use of the opinion in a publicly
filed document, and your discussion of the opinion in the body of the Schedule 14D-9.
Please revise or advise.

January 14, 2005

Page 3

KeyBanc has advised that it has consented to the description of its opinion in the body of the
Schedule 14D-9 and to attaching the opinion as an exhibit to the Schedule 14D-9.

* * * * *

When Norstan files the amended Schedule 14D-9, it will separately furnish its acknowledgement that,
as Norstan has indicated to us:

    •
    The Company is responsible for the adequacy and accuracy of the disclosure in the
filings;

    •
    staff comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose the commission from taking any action with respect
to the filing; and

    •
    the Company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Thank you for your prompt attention to these responses. As stated in the offer materials, the Black
Box offer expires on January 24, 2005, and we appreciate the staff’s cooperation in resolving its
comments quickly enough to meet that timetable.

If you have any questions, please feel free to contact me at 612-672-8326.

Very truly yours,

/s/ Martin R. Rosenbaum

Martin R. Rosenbaum

    cc:

    Scott Christian, Norstan, Inc.

    Anthony Amador, KeyBanc Capital Markets

Attachment

EXHIBIT A

Item 4. The Solicitation or Recommendation.

     (a) Recommendation of Norstan’s Board of Directors. The board of directors of Norstan (i)
determined that the terms of the Offer and the Merger described herein are fair to and in the best
interests of the shareholders of Norstan, (ii) approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, and (iii) unanimously recommended that
Norstan’s shareholders accept the Offer and tender their Shares pursuant to the Offer, approve the
Merger, and approve and adopt the Merger Agreement. A letter to Norstan shareholders communicating
the recommendation of Norstan’s board of directors is filed herewith as Exhibit (a)(3) to this
Statement, and is incorporated herein by reference.

(b)(i)

     Background of the Transaction.

     In June 2003, a private equity fund made an offer to make a $75 million preferred stock
investment in Norstan, convertible at $4.50 per share. The firm subsequently withdrew its proposal.
Norstan retained KeyBanc Capital Markets, a division of McDonald Investments Inc. (“KeyBanc”),
to explore strategic alternatives for Norstan, including seeking a potential minority investor in
or acquirer of Norstan. Based on the proposal, Norstan’s Board instructed KeyBanc
conductedto perform a market test to
explorethe interest ofwhether there were
other private equity firms interested in acquiring a significant equity position in the
Company.In October 2003, Norstan
engagedKeyBanc contacted 62 private equity firms, of which 25 firms
executed confidentiality agreements. Three of these firms submitted preliminary indications of
interest, of which two subsequently withdrew their proposals. The third firm proposed an initial
minority equity investment of $10 million and merger into one of its portfolio holdings. Norstan
did not actively pursue the proposal, as the Company determined that it was too dilutive to Norstan
shareholders.

      As a result of the lack of significant interest from minority investors and the
Company’s declining earnings during late fiscal 2003 and early fiscal 2004, and in response to an
unsolicited offer to acquire the Company in the fall of 2003, the Company decided to pursue a full
sale. In October 2003, Norstan instructed KeyBanc to assist with a potential sale of the
Company by means of a limited auction, in which the offeror described in the preceding sentence
declined to submit a bid. Five potential acquirors of the Company submitted preliminary bids,
one of which was Black Box. The Company executed an exclusivity agreement with one of the other
bidders in November 2003. That bidder presented an offer to acquire Norstan in a cash merger at
a price of $5.00 per share, which was subsequently increased to $5.50 per share. The Company
notified Black Box ofthisthe fact
that it was pursuing other alternatives, and there were no further discussions with Black Box
after that time until September 2004.Negotiations with the other bidder
were terminated after that party reduced its offer, andIn January
2004, the other bidder reduced its offer to $4.12 per share. The Norstan Board of Directors
determined that the revised offer was not in the best interest of shareholders, and negotiations
were terminated. Norstan abandoned its efforts to sell its business in January
2004.2004, and none of the other bidders that
had submitted preliminary bids communicated with Norstan to express any interest in resuming
discussions. Subsequently, Norstan determined to refocus its efforts on its core competencies
and restore its business to profitability. Norstan subsequently focused its efforts on
improving its financial performance which included a major restructuring of its management team,
realignment of its business operations, and a headcount reduction.

     On September 14, 2004, Scott G. Christian, our Chief Executive Officer, received an
unsolicited telephone call from Fred Young, the Chief Executive Officer of Black Box. Mr. Young
inquired as to the possibility of a transaction between the two companies. Mr. Christian explained
that, following Norstan’s January 2004 abandonment of its efforts to engage in a transaction, the
Company had not been seeking a combination transaction or sale of its business. Nevertheless, Mr.
Christian indicated that he would not attempt to stop Black Box from making a serious offer for a
potential transaction. Accordingly, Messrs. Christian and Young agreed to meet and discuss the
combining of the two companies.

     On September 21, 2004, Norstan and Black Box executed a confidentiality agreement, and Mr.
Young met in Minneapolis with Mr. Christian to continue the discussion they had begun in their
telephone conversation. In this discussion, Mr. Young enumerated the strategic benefits that
interested Black Box in a potential transaction with

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Norstan. Mr. Christian discussed with
Mr. Young certain potential synergies between the two companies. At the conclusion of this discussion,
Mr. Christian indicated that, while the Company would evaluate any offer, it was not seeking to
engage in a transaction, and the Company would consider an offer only if management believed the
price was adequate.

     On September 30, 2004, Mr. Young telephoned Mr. Christian to inform him that, after
consideration, Black Box wished to indicate its formal interest in engaging in a potential
transaction with Norstan. Messrs. Young and Christian discussed the basic structure and terms and
conditions of the potential transaction proposed by Black Box. Messrs. Young and Christian also
discussed other terms, including price. Mr. Christian requested that Mr. Young prepare a letter
setting forth the price and other terms in writing, and Mr. Young agreed to send a letter
evidencing Black Box’s intention to pursue such a transaction with Norstan.

     On October 1, 2004, Mr. Young sent a letter to Mr. Christian wherein he expressed an interest,
on behalf of Black Box, in acquiring Norstan. In the letter, Mr. Young set forth Black Box’s
estimation of the enterprise value of the Company of $90 million, without specifying proposed
per-share consideration payable to Company shareholders, and suggested proposed terms and
conditions for the transaction. The letter was not legally binding, and stated that Black Box would
need to conduct due diligence regarding Norstan before it could enter into any definitive
agreement. Mr. Christian, together with other executives of the Company, determined that the
proposal from Black Box was not definitive enough to formally bring before the Company’s board of
directors at that time.

     On October 8, 2004, Mr. Christian and Robert Vold, the Company’s Chief Financial Officer, held
a telephone conversation with representatives of KeyBanc to discuss Black Box’s letter of October
1, 2004. Norstan and KeyBanc concluded the bid was too low to present to the Company’s board of
directors. Subsequently, KeyBanc and Norstan sent a revised term sheet to Mr. Young on October 14,
2004, proposing a $5.75 per share offer, including payment of in-the-money options, warrants and
restricted shares of Common Stock.

     On October 15, 2004, Mr. Young sent a revised letter, formally indicating Black Box’s interest
in acquiring Norstan. This letter contained more specific terms and conditions than, and addressed
many of the concerns raised by Norstan with regard to, the prior letter. Specifically, the letter
set forth Black Box’s willingness, subject to a due-diligence examination, to engage in a cash
tender offer (followed by a merger) at a price of $5.75 per share, representing an enterprise value
of approximately $98 million. The letter also included a form of letter agreement whereby Norstan
would agree to refrain from soliciting other acquisitions of the Company through January 10, 2005
(the “Exclusivity Letter”).

     Norstan’s executive management met on October 15, 2004, to discuss the latest materials
received from Black Box with attorneys at Maslon Edelman Borman & Brand, LLP, Norstan’s outside
legal counsel. At the meeting, management discussed with counsel the structure of the potential
transaction, the basic terms and conditions contained in Mr. Young’s letter and the terms and legal
effect of the Exclusivity Letter. Norstan notified Mr. Young by telephone that Black Box’s
representatives could begin conducting its due-diligence investigation at Norstan’s offices.

     On October 18, 2004, Black Box representatives arrived at Norstan’s offices in Minnetonka,
Minnesota, to perform preliminary legal and business due diligence in order to validate the
consideration and other basic terms of the transaction suggested by its October 15, 2004 indication
of interest. This due-diligence investigation continued through November 5, 2004.

     On October 25, 2004, Messrs. Christian, Young and other representatives from Norstan, KeyBanc
and Black Box met in Minnesota to discuss the terms and conditions of the transaction then under
discussion. The parties discussed general matters relating to the possible transaction, including
the strategic impact of the transaction, recent developments concerning Norstan’s business,
change-of-control agreements and other severance arrangements with members of Norstan’s executive
management team and the change-of-control policy adopted by Norstan with respect to its employees.
On October 29, 2004, Mr. Young had additional discussions with Mr. Christian regarding certain
matters, including the potential synergies of an acquisition of the Company by Black Box, the
strategic impact of the transaction, recent developments concerning the Company’s business,
change-of-control agreements and other severance arrangements with the Company’s executive
management team. On November 1, 2004, Mr. Young again

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met with Mr. Christian at the Company’s
headquarters for further discussions.

     On November 3, 2004, and in preparation for a meeting of Norstan’s board of directors, members
of Norstan’s executive management, including Messrs. Christian and Vold, met to discuss the terms
and conditions of the offer communicated by Black Box in light o