Rob Lloyd is one of three Canadian insiders at Cisco Systems. He runs the entire North American business for the networking giant. How big is that business? Well, the U.S./Canadian portion makes up half of Cisco’s business. The customer-facing staff under Lloyd is about 5,500 people. This does not include the partner base and the support organization. In reality, Lloyd is a mini-CEO given what he is responsible for.
He told CDN in an exclusive interview that the commercial space will one day soon be the company’s largest segment. Currently, its just over 20 per cent of the business, while the enterprise business makes up 45 per cent.
What Lloyd wants to tell the Canadian channel is that the traditional enterprise vendor is switching gears and it is doing it right now.
Lloyd sat down with CDN at the Cisco Partner Summit to discuss the company’s push into the SMB space among other topics.
CDN: The main theme out of this conference is SMB, and in particular the “S” in SMB. Do you think of all the market segments Cisco plays in that small business is the toughest?
Rob Lloyd: I think when we tried to do small business it did not have all the elements of a compelling offer. It did not have the simplicity and it was a scaled down version of the technology. It did not have a customer service offering and it did not have the connection to the monitoring and managed capability. That is part of the proposition today. So Cisco is coming down from the large to the mid and the bigger SMB and is now seeing a lovely product that is a whole offer. Everything has been thought through in a holistic way. The potential new channels with these new accounts they become what I call the trusted IT guy. If we offer a complete offering we will gain market share, but we’ll also grow the market. The research shows this.
CDN: Is the challenge one of perception in the small business market? In the vast majority of companies between five and 99 employees the high tech name that resonates is Microsoft, not Cisco. How do you try to over come that?
R.L.: That is one reason why we put such emphasis on a branding campaign. This is part of the reason for our evolution to a new logo and persona. I know that changing the brand perception and position is a long-term thing. I would agree with you that small businesses and consumers outside of owning our stock are unaware of our company. However, that is changing and we are pretty committed to increasing that position and think about the fact that we touch the customer with Scientific Atlanta and the Linksys sub- brands. The answer is in the long term direction. When we touch a consumer or a small business we want to touch them as Cisco. You will see that in the set-top boxes as Cisco, and in our home portfolio of products as Cisco. I suggest that is something that is a great asset, and if you put that into perspective, Cisco is in 50 million homes today and it is growing really quickly.
CDN: Another one of the messages here is that technology is being driven by the consumer. When did you see this social networking sea change and how different is Cisco plan compared to the other vendors who have made similar announcements?
R.L.: In social networking we have made acquisitions in technology and that goes across all five of our areas. This is important, and we are watching this market evolve. It is used by customers, and this is actually happening really quickly. I am sure someone realized this a year-and-a-half ago. I saw this six months ago. (I thought) it could have an impact on business by using some of these tools. I was at a conference of CIOs and the top three U.S. retailers were there and there was a discussion on educating the customer on why to buy plasma or LCD TVs, which is the No. 1 decision at retail. People are actively testing and asking questions before they come in the store, and that is social networking. Starwood hotels put up an all-new hotel design and you can see it through CAD CAM to make suggestions on the layout of a room and how it sits within the tone of a city. I think there will be an impact on brand testing and with product development cycles. From what I saw, I realized this is just people spending time in an interesting way. It is a network of people who are openly shaping what companies are doing and those that harness these tools and make it a part of the business process I think those companies will win.
CDN: You have been responsible for few global theatres in your career at Cisco. From your perspective how does Canada’s IT channel rank in terms of becoming specialized in either technology or vertical markets?
R.L. You and I both know that the geography of Canada makes the channel structure a challenge. It’s a huge country with a less dense population. The difference in Canada is that we have many more regional and local partners. There are a few national players, and the channel landscape has large national players such as Telus and IBM Global Services, and regional ones and system integrators who are gold partners. What is interesting to me is that a lot have vertical practices. If I was to categorize where the Canadian networking channel is for Cisco, they are very well trained and they’ve got a good balance in channels and are quickly specializing in key vertical. Where we probably can do better is an issue of scale in some of the advanced technologies. I think we can do a little bit better in two of them and that is because of the long, wide country. It is harder to have expertise in a broad sense of the technology in every market, in my opinion. Some of the technology with Telepresence and with Webex and video collaboration tools should enable our partners to be more effective in bringing in this expertise in a consistent way.
You really think of it as a transformational enabler with collaboration tools. We are trying to enable that and we are assisting partners to use offices and Regis, which is in 30 cities in North America. We encourage our partners to use (marketing) dollars and talk to customers about the collaboration platform Webex. I think the collaboration will have a bigger impact on Canadian channel business, but it is still a difficult geography with a long, narrow, wide and consolidated along the ribbon. It is transformational and we need to execute on the vision.
More of the Rob Lloyd interview will be featured in a future issue of CDN.
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