Cisco Systems Inc. has stepped up its commitment to the small and medium business market.
The San Jose, Calif.-based networking firm announced it will invest $2 billion over the next two years in sales programs, research and development, marketing and service and support in this space. In written
statement, company president and CEO John Chambers said the investment will strengthen its SMB Class solutions portfolio, enhance its channel partner programs, and help build awareness about the role of networking solutions in SMB success. The announcement was made as part of last month’s launch of its SMB Class solutions initiative, which combines Cisco products with services, financing, applications and training. They are divided into four categories: network foundation, IP communications, security and mobility.
Peter Alexander, Cisco’s vice-president of worldwide commercial marketing, and Dale Bristow, national manager of small and medium business for Cisco Systems Canada, met with CDN last month to discuss the announcement.
“The SMB Class solutions help level the playing field for SMBs, not just from a geographic perspective, but from a customer satisfaction and operational efficiency standpoint as well,” said Alexander.
Cisco has taken its direction from various industry analyst studies. A 2003 study by the Canadian e-Business Initiative (and partly funded by Cisco) showed Canadian SMBs lead the U.S. and E.U. in cost reductions and productivity gains resulting from Internet business solutions. A January 2003 IDC Canada study revealed 59 per cent of SMBs have completed or are rolling out a network security infrastructure.
Cisco, which defines SMB as 20 to 250 employees, is traditionally known for its large enterprise solutions. More recently it has focused on service providers. “The SMB represents a next frontier for the company,” said Dan McLean, director of Canadian strategic partnering and alliances for IDC Canada, adding that its acquisition of The Linksys Group Inc. in June 2003 demonstrates a stronger play in SMB.
With Linksys products catering to the small office-home office market and Cisco’s solutions aimed at the high-end user, McLean says Cisco is missing some products. “They need a set of products that are competitively priced but have a level of simplicity that doesn’t demand too much engineering.” McLean also said Cisco will need to be selective when choosing partners to service that end of the market.
The RAM Group, a Cisco silver certified partner that specializes in IP communications, security and wireless, says Cisco’s initiative plays very well into its own initiative.
“(Cisco) doesn’t have enough feet on the street to get to the smaller customers,” said Bill Wilkinson, company vice-president of supplier partnership. “I think that’s where there’s a good partner play in this whole area.”