The S of SMB is Cisco’s next target

Traditionally known as a big enterprise player, Cisco Systems began a strong move into the SMB space in 2007 with a host of new product offerings and channel programs designed to drive growth in the segment. While the technology is in place, an analyst says getting the channel marketing strategy right may be the real key to success.

In an interview at C-Scape, Rick Moran, vice-president of solutions marketing Cisco Systems, said 2008 should be less busy from a news perspective, with the focus on tweaking and enhancing the new programs based on partner feedback.

“We’ll be focusing on better integration of the different divisions that sell to the SMB, as well as pulling together the channel programs and messaging,” said Moran. “It was rather segregated before.”

That process has already begun with the recent re-branding of a number of previously standalone brands. New marketing is being developed to tie the previously standalone Ironport, Linksys and Webex brands more closely to the Cisco brand name while still maintaining their own individual identities.

In its research on the SMB space, Moran said Cisco has also learned the type of partner SMBs like to buy from is different from the partners enterprise companies prefer to work with.

“We found a definite division, a lot of SMBs like to buy from VARs that are also SMBs,” said Moran, adding that means the support Cisco needs to give those partners is different.

The way those partners need to sell to SMBs is also different, he said. While technological talk is already on the outs at the enterprise level, for the SMB it needs to be drilled down even deeper and made relevant.

“We’re actually rewriting hundreds of documents in our organization to make them more SMB friendly,” Moran said.

Cisco is already a multi-billion dollar business in the SMB, but while it has 40 per cent penetration in the M segment of SMB that rate falls off significantly in the S component. The challenge for Cisco, said Moran, is how far down to segregate that business, and along what lines to take distinct approaches. The need is for both volumes of channel and channels of volume.

“I don’t know how far we’re going to micro segment it,” said Moran. “Right now the big thing is showing we’ve got our bases covered and showing we’ve got something that suits your needs at this point in time.”

The challenge for Cisco in the SMB is two-fold said Jon Arnold, a Toronto-based analyst with J. Arnold & Associates. They have the technology in place, but the channel strategy will need to be a very different model from what they’ve been used to in the enterprise space.

The second challenge will be selling the marketplace on Cisco (or Linksys) as an SMB player. Without the incumbency that its pervasive routers and telecom equipment gave it in the enterprise space, Arnold said Cisco is starting from scratch in a very crowded, competitive market.

“I think if that brand translates well for them they’ll have an easy sell into that market,” said Arnold. “But if it doesn’t translate that well they really have to start from scratch and build a story that’s going

to work, with a strong value proposition.”

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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