Cisco's Shadow May Blot Out Linksys

The day may soon come when the Linksys brand and channel program is a forgotten memory in the shadow of Cisco's small and midmarket growth ambitions.

Linksys operates independently of Cisco as a wholly owned subsidiary that services the consumer and small business markets with networking and voice products. As Cisco continues to push deeper into Linksys's backyard, company executives concede that they are studying what to do with the Linksys brand.

"Cisco is going to have a strong brand in the commercial and SMB [markets], and we're going to be a sub-brand," said Nigel Williams, vice president of worldwide channel operations and marketing at Linksys.

Talk of the Linksys brand evaporating began in January when Cisco CEO John Chambers hinted at this fate in his CES keynote address. While executives would not confirm that the Linksys brand is going away, there are several signs that point to its demise.

Cisco Tuesday unveiled a series of products and initiatives at its annual partner summit in Las Vegas that are designed to triple solution providers' capacity and revenue in what it calls the SMB market (customers between 5 and 249 employees) over the next three to five years.

CRNTV: Linksys President Charles Giancarlo
On The Vendor's SMB Plans

Further, Linksys and Cisco will soon launch a cross-registration program, under which all solution providers in each other's programs will automatically gain access to all unregistered Cisco and Linksys products. Cisco believes this strategy will encourage its solution providers that offer competitive products to look to Cisco and Linksys before seeking alternatives.

"One of the ways to understand the differences [in the companies] is to understand the products," said Keith Goodwin, Cisco senior vice president of worldwide channels. "There are Cisco partners who carry D-Link and NetGear that should be carrying Linksys."

Cisco and Linksys are coordinating their distribution strategies, ensuring that they're not setting up competing or conflicting distribution channels. "You won't see Linksys setting up a distribution channel in an emerging market and have Cisco come in two weeks later and looking like we didn't know what we were doing," said Williams.

And both Cisco and Linksys executives say there will be overlapping products and technologies in the small and midmarket segments. Williams believes the end users will decide which products to adopt when there are overlapping Cisco and Linksys offerings. When there's a price concern, Linksys should win, he said. When the customer needs scalability and rich features, it's a Cisco deal.

Williams said closer collaboration between Cisco and Linksys will benefit solution providers since they'll have more options for building solutions and fulfilling customers' needs. Likewise, the collaboration may mature to the point where Linksys partners can graduate into higher-level Cisco partner certifications.

"We can show a partner in the SMB market that there's a migration strategy if you stay with Linksys and Cisco," Williams said.

Cisco has about 33,000 solution providers in its registered program, all partners that are not certified as premier, silver or gold status. Linksys has some 12,000 such partners. Company execs estimate the overlap is between 5 percent and 7 percent.

Williams said other companies have successfully managed two brands that deliver different value propositions to the market. But even Williams concedes that Linksys prominence is fading. Other Cisco execs say the issue is being studied, but there's no timeframe for a decision.