Cisco Primes Linksys For Small-Business Channel

Plans for the new program, which are still being finalized, come as Cisco is increasing its across-the-board focus on small customers under both the Cisco and Linksys brands and setting its sights on rivals.

At an event slated for June 5-6 dubbed Connected Office Day, Linksys plans to unveil the program as well as a second, still-secret program built with Cisco, a Linksys spokesperson said. The channel program is scheduled for a global launch in the fall.

With the new partner program, Linksys plans to build in more emphasis on value instead of volume, rewarding solution providers for increasing their investment in Linksys, said Nigel Williams, vice president of worldwide channels at Linksys.

Linksys will also be rolling out partner specializations and increased marketing support in the form of lead-generation activities and market development funds, he said.

Executives from Cisco, San Jose, Calif., made it clear at this month's channel conference that the company intends to knock rival SMB-focused vendors off its partners' line cards. Instead of working with value-priced players such as Hewlett-Packard, 3Com, D-Link Systems and Netgear, Cisco wants partners to add Linksys, its own lower-cost networking line, to their portfolios.

"If Cisco partners are carrying the Cisco brand and a lower-priced brand, we think they should carry the Linksys brand rather than that other brand," said Charlie Giancarlo, Cisco's chief development officer and president of Cisco-Linksys, at Cisco Partner Summit 2007 in Las Vegas.

At the conference, Cisco blurred the lines between it and its Linksys division by rolling out a VoIP system under the Cisco brand name that targets customers with 16 or fewer users. In the past, Cisco has cut itself off at the 20-user mark, leaving the rest of the small-business market to Linksys.

Now, the overlap is intentional. "We are creating overlap. At a certain business size, let's say 15 users, you will be able to choose from either a Linksys solution or a Cisco solution," Giancarlo said. "A Cisco solution will represent a product line that will scale with your company to very large sizes and allow you to integrate with advanced technologies. ... The Linksys set of capabilities is one that can be managed simply by a nontechnically trained individual."

For small-business channel partners, the increased attention on their end of the market means a plethora of new products, marketing programs and financial incentives. It also means partners are likely going to face pressure to bolster their Cisco allegiance by picking up Linksys products.

It's unclear exactly how Cisco hopes to convince partners to bring Linksys on board if they haven't already, but what is apparent is that the rivals it wants to unseat will not go quietly.

ProCurve Networking by HP, for example, expects to add 2,000 U.S. partners to its current base of 3,000 over the next two years, many of which will be focusing on small and medium businesses, said Wenceslao Lado, Americas vice president and general manager for ProCurve, Palo Alto, Calif.

"We worry always about Cisco, but we count on our channel partners to make business decisions based on what's better for their customers and for their business," Lado said. "A fundamental part of our channel program is to identify how we can work within our partners' business model. ... It is not our value proposition to say our partners need to be in this sector or that type of account or work with those value vendors. We're more the contrary."

Next: Linksys rivals go upstream