VARs React To Cisco's Acquisition of Linksys


Consensus says deal will serve partners well


A spot survey of Cisco partners Thursday indicates they view the company's purchase of home networking provider Linksys Group as an opportunity to boost sales to the small business customer.

The top maker of Internet traffic equipment on March 20 said it will pay roughly $500 million in stock for the opportunity to get up close and personal with consumers. Specifically, some of these partners see an opportunity to create deeper impact in the hot IP/telephony market.

"I think it's all positive for us. While [our] focus is midmarket, where the Cisco full-product portfolio competes well, the acquisition could allow us to have a more competitive offering in the small business [arena]," says Robert Keblusek, vice president of business development for Sentinel Technologies. Downers Grove, Ill.-based Sentinel has been a Cisco VAR for more than eight years and possesses Cisco Specialization Certificates in IP/telephony, VPN security and wireless LANs. "The more market segments we can appeal to with similar technology to complement our investment in training and resources, the better," he adds.

While it's true some partners consider the small business market, well, small potatoes, they nonetheless believe there might be enough juice in the eventual amalgam to benefit them down the road. "In the longer term, the capabilities that will be provided to the SOHO market will directly influence sales in the traditional corporate market [we serve]," says Ron Temske, director of converged technology solutions for US Logical, a Cisco Gold partner. "IP telephony is a key focus area for both Cisco and Logical. A strong application of IP telephony is enabling access to the corporate phone system for remote and SOHO workers. [But] currently, the expense to provide such a solution has discouraged many organizations from pursuing this path.

"With the acquisition of Linksys, and the inevitable expansion of that product line to include key features such as quality of service, [these solutions] will become more common. The net effect is that over time, this acquisition will drive additional business for Logical in our current business."

Indeed, the consensus appear to be that Cisco R&D combined with the popular prices championed by Linksys will serve Cisco partners well. "Cisco infusing the product with greater performance while keeping the price attractive to the small business and home owner will only improve the total Sentinel offering and value proposition to the end user," Keblusek says.

What remains largely unanswered in all the chatter about the acquisition is whether the new channel now opened to Cisco -- the retail market -- will ever present any real competition to its partners. After all, mass-market chains such as CompUSA and Circuit City have now become Cisco VARs in the blink of an eye. "Only time will tell if these channels begin to carry other Cisco products, or stick to the small SOHO-oriented product lines," Temske speculates.