SBC Alliance Could Benefit Cisco VARs

Under the new three-and-a-half year deal, Cisco and SBC will work together to sell SBC's managed services. A select group of Cisco's channel partners also will be allowed to sell the managed services, the companies said.

The pact significantly alters SBC's relationship with Cisco, said Mike Reddout, vice president of emerging channels at SBC, San Antonio.

"Previously, we worked with Cisco as a reseller of [customer premise equipment," Reddout said. "Now the focus will be on selling managed services, where we believe there is a huge opportunity."

Nigel Williams, vice president of service provider strategies for Cisco channels, said Cisco and SBC will choose a select group of highly specialized Cisco partners to offer the managed services. While he declined to say how many partners will be chosen, Williams did say the selections will be made by the end of the next quarter.

Cisco solution provider partners will bring not only their value-add to the table, but also their access to midmarket accounts, he said.

Williams said he believes the agreement will help foster cooperation between the service provider and Cisco's channel partners. Solution providers often cite SBC as one service provider that offers Cisco hardware at or near cost to win the transport business.

"We do have some trust and integrity issues to overcome," he said. "But at the executive level, SBC is committed wholly to moving %85 toward managed services."

John Freres, president of Meridian IT Solutions, Schaumburg, Ill., said if executed properly, the deal could be a good situation for both SBC and Cisco partners.

While SBC has a strong presence in Fortune 100 accounts in its territories, it does not have a good reputation in midtier accounts, Freres said.

"Walking into a midtier account and saying, 'I'm from SBC,' is akin to saying, 'I'm from the IRS,' " he said. "These accounts don't get excited about working with the phone company."

Still, in the wake of the service provider meltdowns, regional phone companies such as SBC have emerged as a financially stable choice for data services, he said.

Managed services offered under the SBC-Cisco agreement include fully managed AVVID, Cisco's architecture for voice, video and integrated data that provides voice and data services on a single network; Ethernet optical network, a switched Gigabit Ethernet service; managed security, which bundles Cisco hardware with installation and maintenance, firewall administration and monitoring, and intrusion detection; managed IP-VPN; wireless LAN; and managed hosting.

CHRISTINA TORODE contributed to this story.