Cisco Targets Small VARs With Five-Point Campaign

While its dominance of the overall network infrastructure market is overwhelming, Cisco Systems hasn't historically been known as a major player in the SMB space. Indeed, its reputation for ignoring SMBs, deserved or not, has sparked outright hostility among more than a few in the channel.

Not anymore, if Cisco has its way. Over the past several months, the company has launched a raft of new initiatives aimed at attracting what it calls "SMB-focused resellers." Cisco is driving this campaign forward on five fronts:

1. New Hardware
Scheduled for release in late June, the Smart Business Communications System (SBCS) is a multicomponent hardware offering that Cisco hopes will carry its unified communications technologies into companies with five to 10 seats. The SBCS' centerpiece is the Unified Communications 500 series, a multifunction appliance combining an IP PBX, firewall, VPN, switch and optional wireless LAN access point.

2. New Partner Certification Tier
Cisco launched the Select Certification and SMB specialization programs at its partner summit in April, giving small solution providers access to incentives and rebates such as its Opportunity Incentive Program and Partner Development Fund.

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3. New Managed Services
Cisco plans to roll out a new SMB-targeted remote network monitoring offering this fall. Dubbed "Cisco Smart Care Service" and available for resale through certified partners, it's designed to offer smaller VARs a relatively easy path into managed services without a major investment in infrastructure.

4. Financing Options
In April, Cisco announced that Select Certified partners would have access to its Easy Lease program, simplifying access to SMB financing. In May, the vendor announced an SMB-specific rate on financing for multiyear maintenance services contracts.

5. Training
Cisco recently refreshed all of its SMB-focused online training materials, including business process documentation like statement-of-work and quotation templates. In June, it plans to add SMB-specific "economic blueprints" that draw on data from the vendor's existing partner base to provide specific recommended targets for business metrics such as revenue, margins, attach rates and cost of sales.

Notably missing from these initiatives is anything related to traditionally SMB-focused Linksys products; the Select Certification incentives, for example, don't apply to Linksys products.

"From a profitability standpoint, that will absolutely put Cisco and Linksys products in a different position," says Andrew Sage, Cisco's senior director of worldwide channels marketing. "On the flip side, as a partner, I could beat my head against a wall for a month trying to sell some customers a Cisco solution because they don't value all of its features, and I can sell them the Linksys solution in a minute, because it's what they need."

Dan Schwab, vice president of marketing at Harrisburg, Pa.-based distributor D&H Distributing, views Cisco's SMB push as a significant win for the channel. "Cisco clearly gets it; many of our partners are very excited," he says.

But Cisco might face an uphill battle in convincing some of its channel critics.

"I don't pay a whole lot of attention to anything Cisco says at this point; it's not what you say, it's what you do, and they've done enough," says Pat Walsh, president of Computer Station of Orlando in Longwood, Fla. "There are some good small vendors out there, and if I can find a new vendor with some nice product, I'm going to give them a try long before I let Cisco back in the door."

Others are cautiously optimistic. "The ability to use more Cisco product for smaller customers is wonderful," says Woodie Bowe, director of technical services at SSD Technology Partners, New Castle, Del. "It's true that, in the past, Cisco has ignored SMBs, and obviously this is a growth market right now, so everyone's trying to get their own little piece. My priority, though, is the product. If I have a concern, it's that after a year they'll decide it's not working and go back."