Sean Keohane is CEO of SMC Networks, a wired/wireless networking vendor based in Irvine, Calif., that serves the small- to midsize-enterprise and SOHO markets. Over the past several months, SMC has been working to bolster its wired and wireless product lines, along with its channel programs, and Keohane is on the road this summer to get the message out to solution providers. Keohane recently updated CRN Section Editor Marie Lingblom on SMC's business and channel strategy.
CRN: In which areas is SMC focused and how is the business split?
'We're trying to get quality product out there. ... it's about convincing the channel that we're back.'
KEOHANE: There are two markets we play in,small and medium enterprise is one and the other one is the home networking market, the SOHO market. [The split] is getting close to 50/50. When I joined the company it was about 80/20 home networking. We've refocused a lot more on the small- and medium-size enterprise space %85 but the home market needs to grow.
CRN: What is the solution provider's overall role in home networking? Do you have a channel program set up for the home networking space?
KEOHANE: There are a limited number of resellers out there doing it. It's more sporadic. Most of the mainstream resellers are not even dealing with it because it's very residential and based on broadband. The issue right now is broadband suppliers are also picking it up as a service, and the retailers are picking it up as a service. You go in and buy this stuff retail for $99 and they put the whole thing in. So the resellers are contracting not with the vendors, but with the retail or other channel players.
CRN: Could you give an example of recent channel promotions?
KEOHANE: With some of the switches we were doing a buy-two-get-one-free as a recent promo and also [an] instant rebate, where there's incentive for the VAR to make some additional margins. It's an issue of the right product at the right time. %85 We're trying to get quality product out there and giving [solution providers] the confidence with things like a seed program [to be launched in August] where we'll say, 'Hey, we'll give you [particular products] for free. If 30 days from now you like it, then great, pay for it and buy another one.'%85 It's about convincing the channel that we're back.
CRN: What kinds of margins can resellers expect to make on your products?
KEOHANE: It varies. A lot of it is if they are involved in a piece of business where we can provide the same alternative to say, a Cisco solution, at a lower cost. They can either pass on the savings to the customer or pick up the margin themselves. From our perspective, we're a player who always incorporates the VAR into the process and gives them all a fair return for their efforts even if it impacts our margin. That's just the way we do business.
CRN: What's going on as far as wireless offerings?
KEOHANE: We've introduced [July 15] an enterprise access point and are driving the cost down again of the price per port of a wireless solution. This is going to be [802.11] a/g-based. Our own technology base is driving a/g as a universal technology for wireless. It's a universal solution focused on delivering at the access point and then, subsequent to that, we're developing a wireless switch. That's going to further take the management and the software side of that out of the access point and move it back into a Layer 2 switch sitting in the wiring closet. So you can connect multiple access points, and the management is done back in the wiring closet. That again further reduces the cost of the whole wireless per-PC solution, per-port solution.
CRN: What are customers and internal IT staffs looking for in a wireless solution?
KEOHANE: The issue with wireless is you have to give the MIS guy the bandwidth, authentication, security and management at a price per port for wireless that is relatively the same as wired. What we're doing is working to pull [management] back into the switch and drive the cost out of the access point. If you have modulation issues or physical environment issues, you can triangulate the signal with better antenna reception and it won't cost an arm and a leg to do that.
CRN: There's a lot of talk about market consolidation, particularly considering Cisco's acquisition of Linksys and Proxim's recent financial difficulties. Is SMC committed to remaining independent?
KEOHANE: There's constant, constant noise about consolidation, acquisition. We've been approached, but we're not for sale. %85 We think we can hold our space, and we're diversified enough %85 but it's a very fluid market in terms of that tide.