Cisco to push resellers towards SMB market

HONOLULU – Smaller partners of Cisco Systems Inc. will play a bigger role in the company’s push into the small-to-medium sized business market, the company said on the eve of its annual VAR conference here.

Steve Simmons, channel manager for Cisco Systems Canada, said in an interview the

company will have a different go-to-market strategy with smaller partners than before. He did not want to disclose any details about the strategy before it is officially announced, except to say it will offer additional investments and benefits.

Dan McLean, lead networking analyst for IDC Canada, said Cisco’s 2002 acquisition of Linksys could be Cisco’s arm to penetrate the SMB space.

“”I am interested to see what Cisco does to create a partner program that addresses SMB. (Hopefully) one that goes beyond discounts on volume and instead gets the smaller partner focused on delivering some kind of value add to the customer set through services or high customer touch,”” McLean said.

He added that he expects some kind of new go-to-market strategy on transitioning Canadian partners to become managed service providers for IP telephony will be announced.

“”It is all about managing risk. A customer can pay for it as a service; the same can be said for storage or security. Newer technology lends itself to an on-demand (model). They can try it and see if they want it instead of spending capital investment dollars in new technology. This way it minimizes the risk,”” McLean said.

Murray Wright, general manager of Ingram Micro Canada, said he is also interested in Cisco’s strategy with Linksys and how it will integrate those products into the company’s whole line up.

“”(Cisco) is moving into that SMB marketplace and that is the next frontier for Cisco. They have done an excellent job in the enterprise space and they will look at how to growth the business and move it downstream.””

Cisco will also build on last year’s theme of partner profitability. While last year’s reseller program focused on high margin returns, this year’s plan is a phased approach centering on incentives, Simmons said.

“”The new program is all about layering, with additional elements such as enhancing all components on delivery, additional profitability and the launch of an incentive program,”” Simmons said.

The incentive program makes changes across the board, aimed at injecting more profit into Cisco’s channel business, protecting up-front partner costs and adding resources such as MDF funds to those with advanced technical practices and services.

“”It is all about opportunities. The incentive plan is for hunters of new opportunities and we wanted to reward them for getting that new opportunity,”” Simmons said.

Cisco also wants to help partners who are trying to add more value to IP telephony and communications solutions early in the deal cycle.

“”The focus is around furthering the strategy in advanced technical solutions and to realign (the solutions) toward vertical markets,”” Simmons said.

Wright said Cisco’s partner profitability program is working in Canada.

“”You have to experiment on which buttons to push and I think Cisco is pretty tuned into the market place. I would not bet against them and the incentive program can generate enthusiasm and excitement,”” Wright said.

McLean agreed with Wright, saying that Cisco’s partner program last year set a standard in the networking industry.

“”I find the new incentive program to be an unconventional approach. It’s not just about volume for Cisco. They want partners to step up in the emerging technologies. Cisco does a lot to drive new technology in the market place and it is the partner’s time to adopt them. Strong incentives for partners will do that over volumes. It is more about ideas than volume,”” McLean said.

Another priority for Cisco at the conference will be security. Last year it teamed up with several security vendors for its advanced technical solutions side of the business.

Simmons said security for IP telephony is a critical mass market opportunity for the company and its partners.

He also said there will be announcements on storage and wireless products.

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